[Cobo] U.S. Department of Education Reaches Consensus on Historic New Accountability Framework and Concludes Higher Education Reform Rulemaking Sessions

[Hathaway, Nick]

Business Officers,

Below please find a press release issued by the U.S. Department of Education this morning regarding negotiated rulemaking and the Department’s new accountability framework under the AHEAD committee.

We will continue to monitor developments and share additional guidance as the rulemaking process moves forward.

Nick




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[http://res1.info.ed.gov/res/edgov_mkt_prod1/31489a51450e4f92b9b95309a1ff2aacd1068798cb88d1226d6eeb44e2bec43a.png]





FOR IMMEDIATE RELEASE

January 9, 2025



Contact: Press Office

press at ed.gov<mailto:press at ed.gov>



U.S. Department of Education Reaches Consensus on Historic New Accountability Framework and Concludes Higher Education Reform Rulemaking Sessions

The U.S. Department of Education (the Department) has reached consensus on the third and final regulatory package to implement the historic changes made to higher education as part of President Trump’s Working Families Tax Cuts Act (the Act). This marks the third consecutive time the Department has reached consensus on regulatory changes to implement the Act under the leadership of U.S. Secretary of Education Linda McMahon and Under Secretary Nicholas Kent.



Today, the Department concluded the final session of its Accountability in Higher Education and Access Through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking committee, which focused on implementing a new accountability framework for all institutions of higher education.



Negotiators reached agreement on a historic accountability framework that, for the first time in decades, will hold all postsecondary institutions accountable for inadequate student outcomes—ending the long-standing practice of selective enforcement under the last two Democrat Administrations, based on tax status and politics rather than student outcomes.



An increasing number of students pursuing postsecondary education are financially worse off than if they had never gone to college. Poor earnings, coupled with high costs, make college a bad investment for too many students, ultimately leaving taxpayers to shoulder the burden when some borrowers default. Today, the federal student loan portfolio nears $1.7 trillion, yet institutions of higher education remain largely absolved of responsibility for their role in student loan defaults. This is a bad deal for both students and taxpayers.



Under the consensus-based proposal, the Act’s “Do Not Harm” standard has been harmonized with the existing Financial Value Transparency and Gainful Employment regulations to bring accountability to all programs across sectors, using commonsense earnings thresholds.



“After more than 15 years of regulatory uncertainty under the previous three Administrations, we’ve developed an accountability framework that institutions can work with, students will benefit from, and taxpayers can rightfully expect to improve outcomes,” said Under Secretary of Education Nicholas Kent. “We deeply appreciate the AHEAD Committee negotiators and their efforts to break the cycle of student debt and poor return on investment for students and end the regulatory whiplash that has occurred for far too long. We look forward to holding all programs – across all postsecondary institutions – accountable.”



The AHEAD Committee’s agreed upon language treats all programs – from certificate to graduate programs – equally. Under the proposed framework, institutions will lose access to the Direct Loan program if they fail to meet the relevant earnings thresholds for two out of three years. Further, if at least half of the institution’s Title IV recipients or half of the institution’s Title IV funds come from these failing programs, those programs will also lose Pell Grant eligibility. This framework was lauded by negotiators representing students, institutions, taxpayers, the business community, state agencies, and the legal aid community alike.



As part of the Department's efforts to harmonize accountability regulations, negotiators agreed to eliminate the Gainful Employment “debt-to-earnings” measure. This measure was unnecessarily duplicative of the new earnings metric in terms of identifying the same failing programs, while also creating significant burdens for both institutions and the Department.



Negotiators expressed appreciation for the Department’s commitment to treating all programs fairly and balancing the interests of both students and institutions to create a rule that will endure across Administrations.



Background:

Section 492 of the Higher Education Act (HEA) requires that the Secretary of Education solicit public comment in the development of proposed regulations before publishing a Notice of Proposed Rulemaking implementing programs authorized under Title IV of the HEA. After obtaining advice and recommendations from the public and stakeholders, the Secretary conducts negotiated rulemaking to develop the proposed regulations.



In July, President Trump signed the Act into law, which implemented sweeping changes to simplify the overly complex federal student loan repayment system, create the first Workforce Pell Grant program, and enhance accountability measures for higher education programs.



On July 24, the Department announced its intention to establish the AHEAD Committee to prepare proposed regulations.



For more information on the negotiated rulemaking process, see here<http://t1.info.ed.gov/r/?id=h29c9947,23925f6,239156c>.



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