Accountability in Higher Education and Access Through Demand- Driven Workforce Pell: Student Tuition and Transparency System (STATS) and Earnings Accountability

34 CFR Part 600

Colleges and universities, Grant program--education, Loan programs--education, Reporting and recordkeeping requirements, Student aid, Vocational education.

34 CFR Part 668

Administrative practice and procedure, Colleges and universities, Consumer protection, Grant program--education, Loan programs-- education, Reporting and recordkeeping requirements, Student aid, Vocational education.

34 CFR Part 685

Administrative practice and procedure, Colleges and universities, Education, Loan programs--education, Reporting and recordkeeping requirements, Student aid, Vocational education.

Nicholas Kent, Under Secretary of Education.

For the reasons discussed in the preamble, the Secretary of Education amends parts 600, 668, and 685 of title 34 of the Code of Federal Regulations as follows:

PART 600--INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT OF 1965, AS AMENDED

0 1. The authority citation for part 600 continues to read as follows:

Authority: 20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, and 1099c, unless otherwise noted.

0 2. Amend Sec. 600.10 by revising paragraph (c)(3) to read as follows:

Sec. 600.10 Date, extent, duration, and consequence of eligibility.

* * * * *

(c) * * *

(3) For a gainful employment program or eligible non-GE program under 34 CFR part 668, subpart S, subject to any restrictions in 34 CFR 668.603 on establishing or reestablishing the Direct Loan eligibility of the program, an eligible institution must update its application under Sec. 600.21. * * * * *

0 3. Amend Sec. 600.21 by revising paragraph (a)(11) introductory text and paragraph (a)(11)(vi) to read as follows:

Sec. 600.21 Updating application information.

(a) * * *

(11) For any GE program or eligible non-GE program, as defined under 34 CFR 668.2(b)-- * * * * *

(vi) Updating the certification pursuant to 34 CFR 668.604(a). * * * * *

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

0 4. The general authority citation for part 668 continues to read as follows:

Authority: 20 U.S.C. 1001-1003, 1070g, 1085, 1088, 1091, 1092, 1094, 1099c, 1099c-1, and 1231a, unless otherwise noted.

0 5. Amend Sec. 668.2(b) by: 0 a. Removing the definitions of “Annual debt-to-earnings rate (Annual D/E rate)” and “Discretionary debt-to-earnings rate (discretionary D/ E rate)”; 0 b. Revising the definition of “Cohort period”; 0 c. Adding, in alphabetical order, a definition of “Earnings”; 0 d. Revising the definitions of “Earnings premium”, “Earnings threshold”, “Eligible non-GE program”, “Federal agency with earnings data”, and “Institutional grants and scholarships”; and 0 e. Removing the definitions of “Metropolitan statistical area”, “Poverty Guideline”, “Qualifying graduate program”, and “Substantially similar program”.

The addition and revisions read as follows:

Sec. 668.2 General definitions.

* * * * *

(b) * * *

Cohort period. The set of award years used to identify a cohort of students who completed a program and whose earnings outcomes are used to calculate the earnings premium measure under subpart Q of this part. The Secretary uses a single-year cohort period to calculate the measure for a program when the number of students (after exclusions identified in Sec. 668.403(c)) in the single-year cohort period is 30 or more. The Secretary sequentially expands the cohort period when the number of students completing the program in the single-year cohort period is fewer than 30. The cohort period includes award years that are--

(1) For the single-year cohort period, the fourth award year prior to the year for which the most recent data is available from the Federal agency with earnings data at the time the earnings premium measure is calculated, pursuant to Sec. 668.403.

(2) For the expanded cohort period, the Secretary will sequentially add prior award year data to the single-year cohort in the following order until the cohort equals or exceeds 30 students (unless the Secretary determines the data is unreliable, in which case the cohort size may be increased until the Secretary determines the data is statistically reliable)--

(i) Prior award years within the same program--

(A) The fifth award year prior to the year for which the most recent data is available from the Federal agency with earnings data at the time the earnings premium measure is calculated, pursuant to Sec. 668.403;

(B) The sixth and seventh award years prior to the year for which the most recent data is available from the Federal agency with earnings data at the time

the earnings premium measure is calculated, pursuant to Sec. 668.403;

(ii) For all programs within the same 4-digit CIP code and credential level, the fourth, fifth, sixth, and seventh award years prior to the year for which the most recent data is available from the Federal agency with earnings data at the time the earnings premium measure is calculated, pursuant to Sec. 668.403. * * * * *

Earnings. For the purposes of subparts Q and S of this part, wages, income as reported to the Internal Revenue Service, and other earned income, including from self-employment.

Earnings premium. The amount by which the median annual earnings of students who recently completed a program exceed the earnings threshold, as calculated under Sec. 668.403. If the median annual earnings of recent completers is equal to the earnings threshold, the earnings premium is zero. If the median annual earnings of recent completers is less than the earnings threshold, the earnings premium is negative.

Earnings threshold. (1) For undergraduate programs offered by an eligible institution located in a State, based on data from the Census Bureau, the median earnings for working adults aged 25-34, with only a high school diploma (or recognized equivalent), who worked and were not enrolled in an eligible institution during the year of the associated measured earnings--

(i) In the State in which the institution is located; or

(ii) Nationally, if fewer than 50 percent of the students enrolled in the institution during the award year the calculations are made are from the State where the institution is located.

(2) For graduate programs offered by an eligible institution located in a State, based on data from the Census Bureau, the median earnings of working adults aged 25-34, with only a baccalaureate degree, who worked and were not enrolled in an eligible institution during the year of the associated measured earnings. The median earnings will be--

(i) The lowest of the median earnings of working adults--

(A) In the State in which the institution is located;

(B) In the same field of study under the two-digit CIP or four- digit CIP code, as such data is available and statistically reliable, in the State in which the institution is located; or

(C) Nationally in the same field of study under the two-digit CIP or four-digit CIP code, as such data is available and statistically reliable; or

(ii) If fewer than 50 percent of the students enrolled in the institution during the award year the calculations are made are from the State where the institution is located, the lowest of the median earnings of working adults--

(A) Nationally; or

(B) Nationally in the same field of study under the two-digit CIP or four-digit CIP code, as such data is available and statistically reliable.

(3) For States where the Census Bureau Data necessary to perform the calculations set forth in paragraphs (1) and (2) of this definition are not available, the earnings threshold will be one dollar.

(4) For programs offered by eligible foreign institutions--

(i) For undergraduate programs at these institutions, based on data from the Census Bureau, the median earnings of working adults aged 25- 34 in the United States, with only a high school diploma or recognized equivalent, who were not enrolled in an eligible institution during the year of the associated measured earnings; or

(ii) For graduate programs at these institutions, based on data from the Census Bureau, the median earnings of working adults aged 25- 34, with only a baccalaureate degree, who were not enrolled in an eligible institution during the year of the associated measured earnings. The median earnings will be the lowest of the median earnings of working adults--

(A) Nationally in the United States; or

(B) Nationally in the United States in the same field of study under the two-digit CIP code or four-digit CIP code, as such data is available and statistically reliable. * * * * *

Eligible non-GE program. An educational program (other than a GE program) that is subject to HEA Section 454(c), offered by an institution and included in the institution's participation in the title IV, HEA programs, identified by a combination of the institution's six-digit Office of Postsecondary Education ID (OPEID) number, the program's six-digit CIP code as assigned by the institution or determined by the Secretary, and the program's credential level. Includes all coursework associated with the program's credential level. * * * * *

Federal agency with earnings data. A Federal agency with which the Department enters into an agreement to access earnings data for the earnings threshold or value-added earnings measure. The agency must have individual earnings data sufficient to match with title IV, HEA recipients who completed any eligible program during the cohort period and may include agencies such as the Treasury Department (including the Internal Revenue Service), the Social Security Administration (SSA), the Department of Health and Human Services (HHS), and the Census Bureau. * * * * *

Institutional grants and scholarships. Assistance that the institution or its affiliate controls or directs to reduce or offset the original amount of a student's institutional costs and that does not have to be repaid. Typically, an institutional grant or scholarship includes a grant, scholarship, fellowship, discount, or fee waiver, including a grant or scholarship which could convert to a loan if a student does not meet certain requirements. An institutional grant or scholarship does not include Federal education benefits; State, Tribal, local, or private grants and scholarships that the institution does not control or direct; the institutional share of Federal Campus-based programs; or assistance that must be repaid. * * * * *

0 6. Amend Sec. 668.14 by revising paragraphs (h) through (k) and adding paragraph (l) to read as follows:

Sec. 668.14 Program participation agreement.

* * * * *

(h)(1) In addition to any other conditions that the Secretary may deem appropriate, if an institution does not comply with the provisions of Sec. 668.16(t) (at time of enactment) in two out of any three consecutive award years, the institution will be placed on provisional status and the institution's low-earning outcome programs shall not qualify for title IV, HEA funds.

(2) The institution shall have the opportunity to appeal the Secretary's determination that the institution failed to meet the conditions in Sec. 668.16(t) in two out of any three consecutive award years under subpart G of this part.

(3) Notwithstanding paragraph (h)(1) of this section, an institution's low-earning outcome program is not subject to an automatic loss of eligibility for title IV, HEA funds if--

(i) The institution is not participating in the Direct Loan program and has not participated in that program for the five most recently completed award years; or

(ii) The institution agrees, in an amendment to its program participation agreement, that it will use its authority under 34 CFR 685.203(m)(2) to prevent students from borrowing Direct Loans in the program for at least five years.

(4) The exception in paragraph (h)(3)(ii) of this section only applies if

the Secretary determines that the program has failed to satisfy the requirements of Sec. 668.402, the program is not a low-earning outcome program, and the Secretary determines that it is in the best interest of students.

(i) The Secretary permits the extension of eligibility if, within 120 days of the Secretary's determination, the institution and the Secretary agree to add an amendment with the provisions in paragraph (h)(3)(ii) of this section to the institution's program participation agreement.

(ii) Once granted, the exception will continue to apply for as long as the institution agrees to prevent Direct Loan borrowing in the program.

(i)(1) A program participation agreement becomes effective on the date that the Secretary signs the agreement.

(2) A new program participation agreement supersedes any prior program participation agreement between the Secretary and the institution.

(j)(1) Except as provided in paragraphs (g) and (i) of this section, the Secretary terminates a program participation agreement through the proceedings in subpart G of this part.

(2) An institution may terminate a program participation agreement.

(3) If the Secretary or the institution terminates a program participation agreement under paragraph (f) of this section, the Secretary establishes the termination date.

(k) An institution's program participation agreement automatically expires on the date that--

(1) The institution changes ownership that results in a change in control as determined by the Secretary under 34 CFR part 600; or

(2) The institution's participation ends under the provisions of Sec. 668.26(a) (1), (2), (4), or (7).

(l) An institution's program participation agreement no longer applies to or covers a location of the institution as of the date on which that location ceases to be a part of the participating institution.

0 7. Amend Sec. 668.16 by revising paragraph (t) to read as follows:

Sec. 668.16 Standards of administrative capability.

* * * * *

(t) Demonstrates that at least half of the institution's recipients of title IV, HEA funds and at least half of the institution's total title IV, HEA funds are not from low-earning outcome programs under subpart S of this part; * * * * *

0 8. Amend Sec. 668.43 by revising and republishing paragraph (d) to read as follows:

Sec. 668.43 Institutional and programmatic information.

* * * * *

(d)(1) Program information website. The Secretary will establish and maintain a website with information about institutions and their educational programs. For this purpose, an institution must provide to the Department such information about the institution and its programs as the Secretary prescribes through a notice published in the Federal Register. The Secretary may conduct consumer testing to inform the design of the website.

(i) The website must include, but is not limited to, the following items, to the extent reasonably available:

(A) The published length of the program in calendar time (i.e., weeks, months, years).

(B) As calculated by the Secretary, the median length of calendar time (i.e., weeks, months, years) taken for full-time and less-than- full-time students to complete the program's academic requirements and obtain the degree or credential awarded by the program.

(C) The total number of individuals enrolled in the program during the most recently completed award year.

(D) The total cost of tuition and fees, and the total cost of books, supplies, and equipment, that a student would incur for completing the program within the published length of the program.

(E) Of the individuals enrolled in the program during the most recently completed award year, the percentage who received a Direct Loan program loan, a private loan, or both for enrollment in the program.

(F) As calculated by the Secretary, the median loan debt of students who completed the program during the most recently completed award year or for all students who completed or withdrew from the program during that award year.

(G) As provided by the Secretary, the median earnings of students who completed the program as obtained under Sec. 668.404(c), or of all students who completed or withdrew from the program, during a period determined by the Secretary.

(H) Whether the program is programmatically accredited and the name of the accrediting agency, as reported to the Secretary.

(I) As calculated by the Secretary, the program's earnings premium measure.

(ii) The website may also include other information deemed appropriate by the Secretary, such as the following items:

(A) The primary occupations (by name, SOC code, or both) that the program prepares students to enter, along with links to occupational profiles on O*NET (www.onetonline.org) or its successor site.

(B) As reported to or calculated by the Secretary, the program or institution's completion rates and withdrawal rates for full-time and less-than-full-time students.

(C) As calculated by the Secretary, the medians of the total cost of tuition and fees, and the total cost of books, supplies, and equipment, and the total net cost of attendance paid by students completing the program.

(D) As calculated by the Secretary, the loan repayment rate for students or graduates who entered repayment on Direct Loan program loans during a period determined by the Secretary.

(2) Program web pages. The institution must provide a prominent link to, and any other needed information to access, the website maintained by the Secretary on any web page containing cost, financial aid, or admissions information about the program or institution. The Secretary may require the institution to modify a web page if the information is not sufficiently prominent, readily accessible, clear, conspicuous, or direct.

(3) Distribution to prospective students. The institution must provide the relevant information to access the website maintained by the Secretary to any prospective student, or a third party acting on behalf of the prospective student, before the prospective student signs an enrollment agreement, completes registration, or makes a financial commitment to the institution.

(4) Distribution to enrolled students. The institution must provide the relevant information to access the website maintained by the Secretary to any enrolled title IV, HEA recipient prior to the start date of the first payment period associated with each subsequent award year in which the student continues enrollment at the institution.

0 9. Amend Sec. 668.91 by revising paragraph (a)(3)(vi) to read as follows:

Sec. 668.91 Initial and final decisions.

(a) * * *

(3) * * *

(vi) In a limitation or termination action against a GE program or eligible non-GE program based upon the program's failure to meet the requirements in Sec. 668.403, the hearing official must limit or terminate the program's eligibility unless the hearing official concludes that the Secretary erred in the applicable calculation. * * * * *

0 10. Revise subpart Q to read as follows:

Sec. 668.401 Student tuition and transparency system scope and purpose. 668.402 Student tuition and transparency system framework. 668.403 Calculating earnings premium measure. 668.404 Process for obtaining data and calculating earnings premium measure. 668.405 Determination of the earnings premium measure. 668.406 Reporting requirements. 668.407 Severability.

Sec. 668.401 Student tuition and transparency system scope and purpose.

General. This subpart applies to a GE program or eligible non-GE program offered by an eligible institution, and establishes the rules and procedures under which--

(a) An institution reports information about the program to the Secretary; and

(b) The Secretary assesses the program's earnings outcomes.

Sec. 668.402 Student tuition and transparency system framework.

(a) General. The Secretary assesses the program's earnings outcomes using an earnings premium measure.

(b) Earnings premium measure. For each award year, the Secretary calculates the earnings premium measure for an eligible program, using the procedures in Sec. Sec. 668.403 and 668.404.

(c) Outcomes of the earnings premium measure. (1) A program passes the earnings premium measure if the median annual earnings of the students who completed the program equal or exceed the earnings threshold.

(2) A program fails the earnings premium measure if the median annual earnings of the students who completed the program are less than the earnings threshold.

(3) If a program is designed to prepare a student for employment in a recognized occupation that qualifies for a deduction of tip income under 26 CFR 1.224-1(h), and 50 percent or more of individuals in the occupation receive income from tips, the program will not be considered to have passed or failed the earnings premium measure for any award year in which the Secretary evaluates earnings data from tax year 2025 or prior. In this circumstance, the Department will make earnings data and the earnings threshold that would have been used for the program publicly available.

Sec. 668.403 Calculating earnings premium measure.

(a) General. Except as provided under paragraph (d) of this section, for each award year, the Secretary calculates the earnings premium measure for a program by determining whether the median annual earnings of the students who completed the program equal or exceed the earnings threshold.

(b) Median annual earnings; earnings threshold. (1) The Secretary obtains from a Federal agency with earnings data, under Sec. 668.404, the median annual earnings of the students who completed the program during the cohort period for the fourth tax year following program completion, who are working and are not excluded under paragraph (c) of this section; and

(2) The Secretary uses the median annual earnings of working adults using data from the Census Bureau to calculate the earnings threshold described in Sec. 668.2.

(3) The Secretary determines the earnings thresholds and publishes the thresholds annually.

(c) Exclusions. The Secretary excludes a student from the earnings premium measure calculation if the Secretary determines that--

(1) One or more of the student's Direct Loan program loans are under consideration by the Secretary, or have been approved, for a discharge on the basis of the student's total and permanent disability, under 34 CFR 674.61, 682.402, or 685.212;

(2) The student was enrolled in any other educational program at the institution or at another eligible institution during the calendar year for which the Secretary obtains earnings information under paragraph (b)(1) of this section;

(3) For undergraduate programs, the student completed a higher credentialed undergraduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the earnings premium measure under this section;

(4) For graduate programs, the student completed a higher credentialed graduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the earnings premium measure under this section;

(5) The program in which the student was enrolled was an approved prison education program;

(6) The program in which the student was enrolled was a comprehensive transition and postsecondary program; or

(7) The student died.

(d) Earnings premium measures not issued. The Secretary does not issue the earnings premium measure for a program under Sec. 668.405 if--

(1) After applying the exclusions in paragraph (c) of this section, fewer than 30 students completed the program during the fully expanded cohort period; or

(2) The Federal agency with earnings data does not provide the median earnings for the program as provided under paragraph (b) of this section.

Sec. 668.404 Process for obtaining data and calculating earnings premium measure.

(a) Administrative data. In calculating the earnings premium measure for a program, the Secretary uses student enrollment, disbursement, and program data, or other data the institution is required to report to the Secretary to support its administration of, or participation in, the title IV, HEA programs. In accordance with procedures established by the Secretary, the institution must update or otherwise correct any reported data no later than 60 days after the end of an award year.

(b) Process overview. The Secretary uses the administrative data to--

(1) Compile lists of students who completed each program during the cohort period. The Secretary--

(i) Removes from those lists students who are excluded under Sec. 668.403(c);

(ii) Provides the list to institutions; and

(iii) Allows the institution to correct the information reported by the institution on which the list was based, no later than 60 days after the date the Secretary provides the list to the institution;

(2) Obtain from a Federal agency with earnings data the median annual earnings of the students on each list, as provided in paragraph (c) of this section; and

(3) Calculate the earnings premium measure and provide it to the institution.

(c) Obtaining earnings data. For each list submitted to the Federal agency with earnings data, the agency returns to the Secretary the median annual earnings of the students on the list who are working and whom the Federal agency with earnings data has matched to earnings data, in aggregate and not in individual form.

(d) Calculating earnings premium measure. If the Federal agency with earnings data includes reports from records of earnings on at least 16 students, the Secretary uses the median annual earnings provided by the Federal agency with earnings data to calculate the earnings premium measure for each program.

Sec. 668.405 Determination of the earnings premium measure.

(a) For each award year for which the Secretary calculates the earnings premium measure for a program, the Secretary issues a notice of determination.

(b) The notice of determination informs the institution of the following:

(1) The earnings premium measure for each program as determined under Sec. 668.403.

(2) The determination by the Secretary of whether each program is passing or failing, as described in Sec. 668.402, and the consequences of that determination.

(3) Whether the institution is required to provide the student warning under Sec. 668.605.

(4) Whether the program could become ineligible under subpart S of this part based on its final earnings premium measure for the next award year for which it is calculated for the program.

(5) The determination by the Secretary that the program is a low- earning outcome program and will become ineligible for Direct Loan funds under Subpart S of this part because the program has failed the earnings premium measure in two out of three consecutive award years for which the earnings premium measure is calculated.

Sec. 668.406 Reporting requirements.

(a) Data elements. In accordance with procedures established by the Secretary, an institution offering any GE program or eligible non-GE program must report to the Department--

(1) For each GE program and eligible non-GE program, for its most recently completed award year--

(i) The name, CIP code, credential level, and length of the program;

(ii) Whether the program is programmatically accredited and, if so, the name of the accrediting agency;

(iii) Whether the program meets licensure requirements or prepares students to sit for a licensure examination in any State, and, consistent with the requirements in 34 CFR 668.43(a)(5)(v), a list of all States where the institution has determined the program meets such requirements, including as part of the institution's obligation under 34 CFR 668.14(b)(32); and

(iv) The total number of students enrolled in the program during the most recently completed award year, including both recipients and non-recipients of title IV, HEA funds.

(2) For each student--

(i) Information needed to identify the student and the institution;

(ii) The date the student initially enrolled in the program;

(iii) The student's total cost of attendance (COA) for the award year under HEA section 472;

(iv) The total actual tuition and fees assessed to the student for the award year;

(v) The student's residency tuition status by State or district, as applicable;

(vi) The student's total allowance for books, supplies, and equipment from their COA for the award year under HEA section 472;

(vii) The student's total allowance for housing and food from their COA for the award year under HEA section 472;

(viii) The amount of institutional grants and scholarships disbursed to the student for the award year;

(ix) The amount of other Federal, State, Tribal, or private grants disbursed to the student for the award year; and

(x) The amount of any private education loans disbursed to the student for the award year for enrollment in the program that the institution is, or should reasonably be, aware of, including private education loans made by the institution;

(3) If the student completed or withdrew from the program during the award year--

(i) The total amount the student received from private education loans, as defined in 34 CFR 601.2(b), for enrollment in the program that the institution is, or should reasonably be, aware of;

(ii) The total amount of tuition and fees assessed the student for the student's entire enrollment in the program;

(iii) The total amount of the allowances for books, supplies, and equipment included in the student's title IV, HEA COA for each award year in which the student was enrolled in the program, or a higher amount if assessed the student by the institution for such expenses;

(iv) The total amount of institutional grants and scholarships provided for the student's entire enrollment in the program;

(v) The total amount of Federal, State, private, or other grants and scholarships provided for the student's entire enrollment in the program; and

(4) As described in a notice published by the Secretary in the Federal Register, any other information the Secretary requires the institution to report.

(b) Initial and annual reporting. (1) An eligible institution must report the information required under paragraph (a) of this section no later than--

(i) October 1, following the date these regulations take effect, for the two most recently completed award years prior to that date; and

(ii) For subsequent award years, October 1, following the end of the award year, unless the Secretary establishes different dates in a notice published in the Federal Register.

(2) For any award year, if an institution fails to provide all or some of the information required under paragraph (a) of this section, the institution must provide to the Secretary an explanation of why the institution failed to comply with any of the reporting requirements that is acceptable to the Secretary.

Sec. 668.407 Severability.

If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the part and this subpart, and the application of this subpart's provisions to any other person, act, or practice, will not be affected thereby.

0 11. Revise subpart S to read as follows:

Sec. 668.601 Earnings accountability scope and purpose. 668.602 Earnings accountability criteria. 668.603 Low-earning outcome programs. 668.604 Certification requirements for GE programs and eligible non- GE programs. 668.605 Student warnings. 668.606 Severability.

Sec. 668.601 Earnings accountability scope and purpose.

(a) General. This subpart applies to an eligible non-GE program or a GE program offered by an eligible institution and establishes rules and procedures under which the Secretary determines that the program is eligible for Direct Loan program funds.

(b) Exemption. The provisions of this subpart shall not apply to programs at institutions that enroll only individuals with a documented Specific Learning Disability or Autism, as defined under 34 CFR 300.8.

Sec. 668.602 Earnings accountability criteria.

(a) A GE program or eligible non-GE program provides training that leads to acceptable earnings outcomes if the program--

(1) Satisfies the applicable certification requirements in Sec. 668.604; and

(2) Is not a failing program under the earnings premium measure in Sec. 668.402 in two out of any three consecutive award years for which the program's earnings premium measure is calculated.

(b) If the Secretary does not calculate or issue earnings premium measures for a program for an award year, the program receives no result under the earnings premium measure for that award year and remains in the same status under the earnings premium measure as the previous award year.

Sec. 668.603 Low-earning outcome programs.

(a) Low-earning outcome programs. If a GE program or eligible non- GE program is a failing program under the earnings premium measure in Sec. 668.402 in two out of any three consecutive award years for which the program's earnings premium measure is calculated, the program is a low-earning outcome program and the Secretary notifies an institution of its determination that a program is a low-earning outcome program and the date that the program's participation in the Direct Loan program will end in a notice of determination under Sec. 668.405.

(b) Process for appeal. An institution may appeal a determination under paragraph (a) of this section, through a process described by the Secretary, within 30 days of receipt of a notification of determination indicating that a program is a low-earning outcome program.

(1) An institution may only appeal an earnings premium measure that the program has failed in the three most recent consecutive award years for which the measure was calculated.

(2) An institution that timely submits an appeal that meets the requirements of this section is not subject to any consequences under paragraph (d) of this section while the Secretary considers the appeal.

(c) Basis for appeal. Institutions may not appeal the Secretary's determination under paragraph (a) except on the basis of an error in the Secretary's calculation of the program's earnings premium measure under Sec. 668.403, including only--

(1) The individuals that are included in the list of completers provided to the Federal agency with earnings data under Sec. 668.404;

(2) The determination of the appropriate earnings threshold under the definition of earnings threshold in Sec. 668.2;

(3) The comparison of the median earnings determined by the Federal agency with earnings data and the earnings threshold for the program; and

(4) Such other bases for appeal determined by the Secretary.

(d) Restrictions--(1) Direct Loan program ineligibility. Except as provided in Sec. 668.26(d), or as provided in paragraph (d)(4) of this section, an institution may not disburse Direct Loan program funds to students enrolled in a low-earning outcome program.

(2) Period of ineligibility. An institution may not seek to reestablish the Direct Loan program eligibility of a failing program that it discontinued voluntarily either before or after the earnings premium measure is issued for that program, or reestablish the Direct Loan program eligibility of a program that is ineligible under the earnings premium measure, until two years following the earlier of the date the program loses eligibility under paragraph (a) of this section or the date the institution voluntarily discontinued the failing program.

(3) Restoring eligibility. A low-earning outcome program, or a failing program that an institution voluntarily discontinues, remains ineligible for Direct Loan program participation until the institution establishes the eligibility of that program under Sec. 668.604(b).

(4) Retaining eligibility during orderly program closure. (i) Notwithstanding paragraph (d)(1) of this section, if the Secretary determines that a program has failed to satisfy the requirements of Sec. 668.402, the program is not a low-earning outcome program, and the Secretary determines that it is in the best interest of students, the Secretary may allow such program to continue participation in the Direct Loan program. Such participation shall not exceed the lesser of 3 years or the full-time normal duration of the program. The Secretary permits the extension of eligibility if, within 120 days of the Secretary's determination, the institution and the Secretary agree to add an amendment to the institution's program participation agreement, that requires the institution to--

(A) Cease accepting new enrollments on or after the date of the agreement;

(B) Engage in an orderly closure of the program in which the institution provides an opportunity for enrolled individuals to complete their program regardless of their academic progress at the time of closure;

(C) Inform the institution's State authorizing agency and accrediting agency and to meet any program discontinuation or closure requirements of those agencies;

(D) Acknowledge that the program has been voluntarily discontinued and subject to the requirements of Sec. 668.603(c)(2);

(E) Maintain the program under a warning status and provide warning notice to students in accordance with the requirements set forth in Sec. 668.605, with the exception of (c)(1)(ii) of that section;

(F) Provide to students the academic and financial options to continue their education in another program to which the student's academic credit would transfer that has not failed to satisfy the requirements of Sec. 668.402, either at the same institution or a different institution;

(G) Agree not to restart the same program or to start a program that shares the same 4-digit CIP code for at least two award years following the completion of the orderly closure described under paragraph (d)(4)(i)(B) of this section.

(ii) An institution may not add the addendum provided in Sec. 668.603(c)(4)(i) in cases where the program or the institution based upon the program's compliance is subject to a probation or equivalent action by a recognized accrediting agency or State regulatory agency (including licensing Boards), or where the institution is subject to Sec. 668.162(c) or (d)(2).

(5) Limitation. The ending of a program's participation in the Direct Loan program is not considered a limitation under Sec. 668.94.

Sec. 668.604 Certification requirements for GE programs and eligible non-GE programs.

(a) Program participation agreement certification. As a condition of its continued participation in the title IV, HEA programs, an institution must certify in its program participation agreement with the Secretary under Sec. 668.14 that each of its currently eligible GE programs and eligible non-GE programs included on its Eligibility and Certification Approval Report meets the requirements of paragraph (c) of this section. As provided under 34 CFR 600.21(a)(11)(vi), an institution must update the certification within 10 days if there are any changes in the approvals for a program, or other changes for a program that render an existing certification no longer accurate.

(b) Establishing eligibility and disbursing funds. (1) An institution establishes a program's eligibility for Direct Loan program funds by updating the list of the institution's Direct Loan-eligible programs maintained by the Department to include that program, as provided under 34 CFR 600.21(a)(11)(i). By updating the list of the institution's Direct Loan-eligible programs, the institution affirms that the program satisfies the certification requirements in paragraph (c) of this section. Except as provided in paragraphs (b)(2) and (3) of this section, after the institution updates its list of Direct Loan- eligible programs, the institution may disburse

Direct Loan program funds to students enrolled in that program.

(2) An institution with one or more failing programs that the institution voluntarily discontinued or that became ineligible as described in Sec. Sec. 668.603(c) may not update its list of Direct Loan-eligible programs as outlined in this paragraph (b)(2).

(i) Until the two-year loss of eligibility period under Sec. 668.603 has expired for the failing program, the institution may not update its list of Direct Loan-eligible programs to include a program that--

(A) Is offered at the same credential level as the failing program;

(B) Shares the same 4-digit CIP code as the failing program; and

(C) Shares one or more overlapping SOC codes, according to the CIP SOC Crosswalk that is provided by a Federal agency, as the failing program;

(ii) After the two-year loss of eligibility period under Sec. 668.603 has ended, the institution may not update its list of Direct Loan-eligible programs to include the failing program if the program was also a failing program under Sec. 668.402 in either of the two most recent award years; and

(iii) After the two-year loss of eligibility period under Sec. 668.603 has ended, if the failing program was also a failing program under Sec. 668.402 in either of the two most recent award years, the institution may not update its list of Direct Loan-eligible programs to include a program that--

(A) Is offered at the same credential level as the failing program;

(B) Shares the same 4-digit CIP code as the failing program; and

(C) Shares one or more overlapping SOC codes, according to the CIP SOC Crosswalk that is provided by a Federal agency, as the failing program.

(c) Direct Loan program eligibility certifications. An institution certifies for each Direct Loan-eligible program included on its Eligibility and Certification Approval Report, at the time and in the form specified in this section, that--

(1) The institution agrees to comply with the requirements of subparts Q and S of this part; and

(2) Such program is approved by a recognized accrediting agency or is otherwise included in the institution's accreditation by its recognized accrediting agency, or, if the institution is a public postsecondary vocational institution, the program is approved by a recognized State agency for the approval of public postsecondary vocational education in lieu of accreditation.

Sec. 668.605 Student warnings.

(a) Events requiring a warning to students and prospective students. The institution must provide a warning with respect to a GE program or eligible non-GE program to students and prospective students for any year for which the Secretary notifies an institution that the program could become ineligible for the Direct Loan program under this subpart based on its final earnings premium measure for the next award year for which it is calculated for the program.

(b) Subsequent warning. If a student or prospective student receives a warning under paragraph (a) of this section, but does not seek to enroll until more than 12 months after receiving the warning, the institution must again provide the warning to the student or prospective student, unless, since providing the initial warning, the program has passed the earnings premium measure for the two most recent consecutive award years in which the metric was calculated for the program.

(c) Content of warning. The institution must provide in the warning--

(1) A warning, as specified by the Secretary in a notice published in the Federal Register, that--

(i) The program has not passed standards established by the U.S. Department of Education based on the reported earnings of program graduates;

(ii) The program could lose access to Direct Loans based on the next calculated program metrics; and

(iii) For an institution that has failed to comply with the requirements of Sec. 668.16(t) in at least one of the three most recent consecutive award years, the program could also lose access to the other title IV, HEA programs;

(2) The relevant information to access the program information website maintained by the Secretary described in Sec. 668.43(d);

(3) A statement that the student must acknowledge having viewed the warning before the institution may disburse any title IV, HEA funds to the student; and

(4) For a student who is eligible for Pell Grant funds, a description of the student's remaining lifetime eligibility for Pell Grant funds and an explanation that all Pell Grant funds received for enrollment in the program count against the student's future lifetime eligibility.

(d) Delivery to enrolled students. (1) An institution must provide the warning required under this section in writing, by hand delivery, mail, or electronic means, to each student enrolled in the program no later than 30 days after the date of the Secretary's notice of determination under Sec. 668.405 and maintain documentation of its efforts to provide that warning.

(2) The warning must be the only substantive content contained in these written communications.

(3) The warning regarding the student's remaining Pell Grant eligibility under Sec. 668.605(c)(4) must be provided to an enrolled student at the time that the institution makes a disbursement of Pell Grant funds to that student.

(e) Delivery to prospective students. (1) An institution must provide the warning as required under this section to each prospective student or to each third party acting on behalf of the prospective student at the first contact about the program between the institution and the student or the third party acting on behalf of the student by--

(i) Hand-delivering the warning as a separate document to the prospective student or third party, individually or as part of a group presentation;

(ii) Sending the warning to the primary email address used by the institution for communicating with the prospective student or third party about the program, provided that the warning is the only substantive content in the email and that the warning is sent by a different method of delivery if the institution receives a response that the email could not be delivered; or

(iii) Providing the warning orally to the student or third party if the contact is by telephone.

(2) An institution may not enroll, register, or enter into a financial commitment with the prospective student with respect to the program earlier than three business days after the institution delivers the warning as described in paragraph (f) of this section.

(f) Acknowledgment prior to enrollment and disbursement. An institution may not allow a prospective student seeking title IV, HEA assistance to sign an enrollment agreement, complete registration, or make a financial commitment to the institution, or disburse title IV, HEA funds to the student until the student or prospective student completes the acknowledgment described in paragraph (c)(3) of this section.

(g) Discharge claims. The provision of a student warning or the acknowledgment described in paragraph (c)(3) of this section does not mitigate the institution's responsibility to provide accurate information to students concerning program status, nor will it be considered as dispositive evidence against a student's claim if applying for a loan discharge.

Sec. 668.606 Severability.

If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of this part and subpart, and the application of this subpart's provisions to any other person, act, or practice, will not be affected thereby.

PART 685--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

0 12. The authority citation for part 685 continues to read as follows:

Authority: 20 U.S.C. 1070g, 1087a, et seq., unless otherwise noted.

0 13. Effective August 31, 2026, amend Sec. 685.102(a)(1) by adding, in alphabetical order, “Eligible non-GE program” and “Gainful employment program (GE program)” to read as follows:

Sec. 685.102 Definitions

(a)

(1) * * *

Eligible non-GE program * * * * *

Gainful employment program (GE program) * * * * *

0 14. Effective August 31, 2026 revise Sec. 685.300(a) to read as follows:

Sec. 685.300 Agreements between an eligible school and the Secretary for participation in the Direct Loan program

(a) General. Participation of a school in the Direct Loan program means that eligible students at the school may receive Direct Loans. To participate in the Direct Loan program, a school must--

(1) Demonstrate to the satisfaction of the Secretary that the school meets the requirements for eligibility under the Act and applicable regulations;

(2) Enter into a written program participation agreement with the Secretary; and

(3) As part of such agreement, in order to maintain eligibility for a GE program or an eligible non-GE program to participate in the Direct Loan program, show that such program meets the student tuition and transparency system requirements under 34 CFR part 668, subpart Q, and the earnings accountability requirements under 34 CFR part 668, subpart S. * * * * * [FR Doc. 2026-13286 Filed 6-30-26; 8:45 am] BILLING CODE 4000-01-P