In a Federal Register notice published Monday, June 18, 2018, the U.S. Department of Education (the “Department”) announced that it would allow additional time for institutions subject to the “Gainful Employment” regulations to comply with certain disclosure requirements. The disclosure requirements were originally to have taken effect on July 1, 2017, but the Department announced on June 30, 2017, that it would provide institutions until July 1, 2018 to comply. This latest notice extends the deadline for compliance until July 1, 2019.

The Gainful Employment regulations require all education programs offered by proprietary institutions of higher education, and non-degree programs offered by public and private nonprofit institutions, to meet specific debt-to-earnings measures in order to remain eligible for federal student financial aid. Through this announcement, institutions now have one year’s additional time to comply with the prospective student disclosure provisions at 34 CFR §668.412(d) and (e), which require both general and individually-targeted disclosures to potential students. Those regulations require that institutions incorporate the Gainful Employment program disclosure template into their promotional materials, and also require direct distribution – and verified receipt – of the disclosure template to prospective students. Importantly, requirements at 34 CFR §668.412(a), (b), and (c), mandating the disclosure and annual updating of the disclosure template on applicable program websites, are currently in effect and remain so.

In this announcement, the Department also noted that it conducted three negotiated rulemaking sessions relating to the Gainful Employment regulations, which concluded without consensus on March 15, 2018. Consequently, the Department indicated that it intends to issue proposed regulations that would replace the existing Gainful Employment regulations, and that it continues to evaluate the efficacy and administrative burden of such disclosures in connection with the proposed rulemaking. Until such time as new regulations are promulgated, however, any applicable Gainful Employment regulatory provisions remain in effect unless they have been specifically delayed.

We continue to monitor developments on the Gainful Employment regulations and other Department matters.