Washington Watch: AACC comments on proposed accountability regulations

“The American Association of Community Colleges (AACC) has filed comments on proposed regulations that will establish a new accountability scheme to measure all Title IV programs against an earnings benchmark. The Education Department (ED) is expected to issue a final rule before July 1. The regulatory package garnered consensus in the negotiated rulemaking process that preceded issuance of the rule. The proposed rules would implement provisions of the Working Families Tax Cut Act (WFTCA, otherwise known as the One, Big, Beautiful Bill Act, or OBBBA) that establish new earnings-based metrics for undergraduate and graduate programs. Under the statute, the median earnings of undergraduate program completers must exceed the median earnings of workers age 25 to 34 with a high school education (the earnings threshold). In most cases, the earnings threshold is based on workers in the state where the institution is located. If a program fails to meet this standard in two out of any three consecutive years, it is deemed a “low-earning outcome program” and loses its eligibility for the Direct Loan program. The rules will take effect July 1, 2027. Although WFTCA applies only to degree programs at the undergraduate level, the Notice of Proposed Rulemaking applies that same standard to all undergraduate certificate programs that are currently subject to the gainful employment (GE) regulations. The proposed regulations jettison the existing GE “debt-to-earnings” metric, which AACC has long preferred to the earnings premium measure, to bring all programs (GE and non-GE) under the same accountability framework. This also means that, in most cases, GE programs only stand to lose Direct Loan eligibility if they fail the metrics, rather than all Title IV eligibility, including Pell grants, as was the case under GE. This makes the metric’s stakes somewhat lower, but certainly not of great potential impact on many campuses. In addition, the NPRM adds a provision not anticipated in previous law or policy, under which in cases where more than 50% of students are in low-earning outcome programs or more than 50% of the institution’s Title IV aid goes to students in those programs in two out of three consecutive years, all the institution’s low-earning outcome programs would lose federal student aid eligibility. Where AACC stands While it is unlikely that any community colleges will face this extreme sanction, AACC strongly objects to this proposed policy. One of the association’s arguments is that, for community college degree programs, it exceeds statutory authority. AACC also urges ED to compare GE program earnings to earnings of high school diploma workers aged 18 to 22, rather than 25 to 34, arguing that the earnings of older workers are influenced by much more than their educational attainment. OBBBA requires the use of the 25-to-34-year-old high school graduate cohort as a benchmark for undergraduate degree programs. The comments also call on ED to scale back its proposed process for assembling a sufficiently sized student cohort to establish a program’s median earnings. To get to a cohort of at least 30 program completers, the cohort would start with the program in question and add up to four earlier years of program completers to reach a cohort of 30. If that doesn’t do the trick, completers of programs with the same four-digit Classification of Instructional Program (CIP) code would be added. If a cohort of 30 is not yet achieved at that point, the process is repeated using all programs with the same two-digit CIP code. AACC argues that this is one step too far, asserting that under this arrangement, programs highly dissimilar to the program that is being measured would be incorporated. The NRPM also outlines the process by which institutions will submit various data on Title IV-aided students and, in some cases, all students. These new reporting requirements are built on the Financial Value Transparency reporting requirements put into place by the Biden administration. The post Washington Watch: AACC comments on proposed accountability regulations first appeared on Community College Daily .

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