UPDATE ON GAINFUL EMPLOYMENT

The American Association of Cosmetology Schools gained some relief for cosmetology programs. Last week, Federal District Judge Rudolph Contreras blocked the U.S. Department of Education from enforcing part of the Gainful Employment rule against AACS member schools. Mr. Contreras said that the GE rule arbitrarily restricts the appeals process for cosmetology schools whose graduate’s earnings are often paid in cash that isn’t reported to the Internal Revenue Service. The judge ordered the Department to give affected cosmetology programs more flexibility to file earnings appeals and to extend the appeals deadline. The judge says the ruling is “narrowly tailored” and “avoids upending the entire regulation while giving affected AACS schools more options for appeal”.

In an eleventh hour announcement on the evening before the GE deadline, the U.S. Department of Education announced a further delay of several provisions of the Gainful Employment regulations. The delay gives all schools (not just cosmetology) until July 1st, 2018 to submit alternative earnings appeals to GE Debt-to-Earnings Rates. Since schools are being given additional time to review and submit appeal data, the Department is also postponing until July 1, 2018, the provisions of the rules which would have required schools with failing programs to begin providing warnings directly to students as well as on their websites and in their promotional materials.

All other GE regulations remain in effect and schools must still provide the required GE program disclosures on their website using the Department’s template. Furthermore, schools are still expected to report data on all Title IV students enrolled during the 2016-2017 award year to NSLDS by October 1, 2017 unless something else changes. The Department has indicated that they will provide additional information within the next 30 days including new deadlines. For more information read GE Electronic Announcement #106 here.


This article first appeared in our July 2017 Newsletter. Sign Up Here