Posted Date: November 21, 2012

Author:  Robin Minor, Chief Compliance Officer, Federal Student Aid

Subject: Gainful Employment Electronic Announcement #41- Requirements for Adding New Educational Programs

As we noted in Gainful Employment Electronic Announcement #39, on June 30, 2012, the U.S. District Court for the District of Columbia issued a decision that vacated several provisions in the gainful employment regulations that the Department published on October 29, 2010 and June 13, 2011. This Electronic Announcement addresses the part of the court's decision that vacated the regulations that went into effect July 1, 2011 related to institutions adding new programs.

Based on the court's decision, the requirements that went into effect on July 1, 2011, under 34 CFR 600.10(c) and 600.20(d), that addressed the types of new programs about which institutions had to notify the Secretary and the form of the notice institutions were required to provide, are no longer in effect. Therefore, institutions should refer to those regulatory sections as they existed prior to July 1, 2011, and any other provisions or applicable terms and conditions that require institutions to obtain approval for new programs. The new program provisions that are now in effect are described below in detail. Unless otherwise noted, all references in this Electronic Announcement to 34 CFR 600.10(c) and 600.20(d) refer to those regulations as they existed prior to July 1, 2011.

Also, even if the Secretary's approval is not required, an institution may notify the Department of a new educational program by adding the program to the institution's Application for Approval to Participate in the Federal Student Aid Programs (E-App).

Programs for Which Institutions Must Seek the Secretary's Approval

Provisional Certification –

A provisionally certified institution with a Provisional Program Participation Agreement (Provisional PPA) that restricts its ability to offer new programs without first applying for and receiving the Secretary's approval must comply with the terms of its Provisional PPA and apply for the Secretary's approval of any new educational program. The Secretary must approve the program before the institution may disburse Title IV funds to or on behalf of students enrolled in that program. See 34 CFR 668.13(c)(4) (requiring provisionally certified institutions to comply with "any additional conditions specified in the institution's program participation agreement that the Secretary required the institution to meet in order for the institution to participate under provisional certification").

Other Circumstances –

An institution already participating in the Title IV programs must apply for the Secretary's approval of a new educational program prior to disbursing Title IV funds to or on behalf of students enrolled in that program if the new program –

    • Does not lead to an associate, baccalaureate, professional, or graduate degree; and the program does not prepare students for gainful employment in the same or related recognized occupation as an education program that has previously been recognized as an eligible program by the Secretary. See 34 CFR 600.10(c)(2).

    • Is a short-term program of at least 10 weeks of instructional time and between 300 and 599 clock hours in length and that is required to meet additional eligibility requirements for completion and placement rates. See 34 CFR 668.8(d), (e)(2) (requiring programs to submit an attestation).

    • Will be offered by an institution that the Department has notified must apply for approval of an additional educational program or a location. See 34 CFR 600.20(c)(1)(v).

    • Will lead to a higher, previously unapproved, level. For example, a Bachelor's degree program at an institution that previously offered only certificates and Associates degrees. See 34 CFR 600.20(c)(2).

    • Is a Direct Assessment program. See 34 CFR 668.10(b).

    • Is a Comprehensive Transition and Postsecondary (CTP) Program. See 34 CFR 668.232.

Institutions should use the Department's E-App at eligcert.ed.gov to apply for approval of the types of programs listed above. The institution should include only the additional information identified in Section M of the E-App, or any other information requested by the Department.

Note: Institutions are not required to provide the Notice of Intent that was described in Gainful Employment Electronic Announcement #5, and updated by Gainful Employment Electronic Announcement #16.

Programs for Which Institutions are Permitted to Self-Determine Eligibility

There are two circumstances where an institution can make a self-determination of a new educational program's Title IV eligibility. To qualify under either of these circumstances, the program must have obtained all applicable state and accrediting approvals.

If the program has met its accreditation requirements, no approval from the Secretary is needed for the institution to offer a new program when:

    1. The added program leads to an associate, bachelor's, professional, or graduate degree and the institution has already been approved to offer programs at that level and the institution has not been notified of the need to obtain approval before adding any new programs (See 34 CFR 600.10(c)(2)(i), 600.20(c)(1)(v), 668.20(c)(2)), or

    2. A fully certified institution (one not on provisional certification) adds a non-degree program that is at least:
      • 10-weeks of instructional time in length (See 34 CFR 668.8(d)(2)),

      • 8 semester hours, 12 quarter hours, or 600 clock hours (See 34 CFR 600.10(c)(2)(ii)(B)), and

      • Prepares students for gainful employment in the same or related recognized occupation as an educational program that the Department has already recognized as an eligible program at the institution. See 34 CFR 600.10(c)(2)(ii)(A). Note that "recognized occupation" as defined in 34 CFR 600.2, requires that the institution must identify a Standard Occupational Classification (SOC) code in which program graduates typically find employment.

IMPORTANT NOTE: If an institution's self-determination of a program's Title IV eligibility is later found to be incorrect, the institution is liable for all Title IV funds disbursed to or on behalf of students enrolled in that program. See 34 CFR 600.10(c)(3).

Although institutions are not required to notify the Department of these programs prior to disbursing Title IV funds, institutions are encouraged to use the E-App to add all new Title IV eligible programs, including degree programs at proprietary institutions, to the institution's Eligibility and Certification Approval Report (ECAR). Any new programs must also be included on the institution's next recertification application.

Contact Information

If your institution has any questions about the information in this Electronic Announcement, or to ask for assistance in determining whether the institution must apply to the Secretary for approval of a particular new program, you may contact the School Participation Team (SPT) for your state. The telephone numbers for the SPTs can be found at www.eligcert.ed.gov .

Information and updates related to Gainful Employment will be posted on the Gainful Employment Information Page. This page can be accessed either by clicking on the words "Information Page" in the Gainful Employment box on the right hand side of the IFAP home page or by going directly to http://ifap.ed.gov/GainfulEmploymentInfo/.

   

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