AHEAD Rulemaking Session on Accountability Begins

Day 4 RECAP

Session two of AHEAD continued on Thursday as negotiators moved into the final phase of discussion on the proposed accountability framework. The Department opened the day by reviewing revised regulatory text and edited definitions with the Committee.

The Department distributed additional data and supporting materials to inform the Committee’s review of the proposed accountability framework.

Materials distributed by the Department on Day 4:

• Day 4 - Amendatory Text Changes* 
• Supplemental PPD:26 Data – Military Programs*
• Supplemental PPD:26 Data – Delinquency and Default Rates*
• Supplemental PPD:26 Data – Student Income*
• Supplemental PPD:26 Data – Geographic Variables*
• Data Request_Aggregate Totals in PPD Data*
• Data Request_Cohort Aggregation*
• Data Request_Pass Fail Rates by Credential and Field, Borrower Weighted*
• Data Request_Pell and Loan Disbursements to GE Programs*
• Summary of Data Supplements*
• Data Updates*

Much of Thursday’s session was devoted to caucuses. The Department convened multiple closed-door caucuses with individual negotiators and groups of negotiators to walk through its rationale, clarify intent, and explore whether remaining concerns could be addressed through further revisions to the regulatory text in an effort to reach consensus. These discussions covered a range of issues, including the structure of the earnings test, the consequences of program failure, and how to mitigate potential disruptions for students currently enrolled in affected programs.

Negotiators continued to raise questions about the application of sanctions following repeated failures under the earnings test. Under the Department’s proposal, programs that fail the earnings test would lose access to federal student loans, but not Pell Grants. Consumer protection/legal aid negotiators have advocated for failing programs to also lose access to Pell Grants and convened a caucus on this issue that included all negotiators except representatives of proprietary institutions and the Department.

As discussions progressed, the Department stated that it plans to return prepared to present additional revised regulatory language, recognizing that further changes may still be insufficient to resolve all outstanding disagreements. The Department emphasized its intent to demonstrate good faith efforts to reach agreement as the Committee approaches a final decision point.

The Department also noted that if consensus is not reached, it would retain flexibility to modify the proposal before publishing a notice of proposed rulemaking for public comment.

Negotiations are expected to conclude on Friday, when the Committee is scheduled to hold a vote on whether consensus has been achieved on the session two accountability provisions.

Day 3 RECAP

AHEAD continued its work on session two of negotiated rulemaking on Wednesday, with discussions centered on implementation, enforcement, and appeals under the proposed accountability framework. The day began with a presentation from the Department titled “Timeline for Implementing the Earnings Test,” which outlined how the proposed earnings test would be phased in over time.

The Department explained that, while the One Big Beautiful Bill Act establishes a statutory effective date of July 1, 2026, the proposed implementation would follow a phased approach. Under the timeline presented, 2027 would be the first year in which a program could receive an initial failure or first strike under the earnings test. That first evaluation would be based on the earnings of students who completed their programs between July 2020 and June 2021, reflecting a four-year gap between completion and evaluation. The Department emphasized that this four-year lag would apply across future evaluation cycles. If a program were to receive a second failure, July 1, 2028, would be the earliest date on which it could lose access to federal student loan funding.

A significant portion of the day was devoted to discussion of the proposed appeals process. Under the Department’s proposal, once a school receives notice of a failure, it would have an opportunity to review the underlying data and raise concerns during an initial review period. Institutions could challenge errors in the input data, such as the inclusion of an incorrect cohort or a calculation error, within a six-month window. If no correction is made during that period, or if the Department declines the request, the institution would then have the option to pursue a formal appeal.

Department officials were clear that appeals would be limited strictly to challenges related to the input data used in the earnings calculation and to instances in which the Department may have misapplied that data. Appeals would not extend to broader policy arguments or alternative interpretations of program performance. Negotiators debated whether the statute’s reference to a determination requires a broader scope for appeals, but the Department maintained that limiting appeals to data accuracy is necessary for administrative feasibility.

Negotiators also highlighted concerns about the time period used for the initial earnings calculations, noting that the first cohort to be evaluated completed during the COVID 19 pandemic. Several committee members questioned whether earnings outcomes from that period adequately reflect normal labor market conditions and raised concerns about how those disruptions could affect program results.

In addition, negotiators discussed how earnings data may reflect differences between rural and urban labor markets. Several participants noted that wage levels and employment patterns vary significantly by geography, raising questions about how the earnings test would account for those differences across regions.

In addition to the appeals process, negotiators discussed post failure ineligibility periods and student warning requirements. Some negotiators proposed extending the period of ineligibility following a second failure or creating pathways for institutions to regain eligibility. Others debated the scope and content of required student warnings, with comparisons drawn to prior Gainful Employment requirements.

The Department reminded negotiators that any additional proposals for changes to the regulatory text must be submitted by 7:30 a.m. Thursday. Jeff Arthur and Ryan Claybaugh, the negotiators representing proprietary institutions, will be submitting additional proposals ahead of the deadline.

The remainder of the week is expected to focus on review of those proposals and discussion of any revised regulatory language the Department may present, as the Committee works toward a final determination on whether consensus can be reached.

Day 2 RECAP

Session two of AHEAD continued on Tuesday with a presentation from the Department outlining its proposal to apply an earnings based accountability test aligned with the One Big Beautiful Bill Act. Department officials reiterated that, under the proposal, an earnings premium measure would be applied in place of a debt to earnings test, marking a shift in how program outcomes would be evaluated under the accountability framework.

The Department explained that the proposed earnings measure would compare the earnings of program completers to appropriate comparison groups based on credential level. For undergraduate programs, earnings would be evaluated relative to individuals with only a high school diploma, while graduate programs would be compared to peers with lower-level degrees. Officials emphasized that the intent is to align existing accountability rules with the statutory framework enacted in OBBBA.

Following the presentation, the Committee spent the remainder of the day discussing Topic 3 and Topic 4, both of which relate to the Student Tuition and Transparency System. Topic 3 focused on metric calculation, while Topic 4 addressed reporting requirements. A significant portion of the discussion centered on how earnings data would be calculated and reported under the proposed framework.

There was extensive discussion of the earnings test methodology, with particular attention paid to cosmetology programs. Negotiators raised questions about the age range of graduates included in earnings calculations, how tipped wages are captured and reported through federal data systems, and how self-employment and part-time work would be reflected in earnings outcomes. Committee members also discussed the reliability and limitations of available earnings data and how those limitations could affect certain program types.

Several negotiators expressed concern about the potential impact of the earnings measure on programs with unique labor market characteristics, including cosmetology and massage therapy. Participants noted the history of litigation related to Gainful Employment regulations and raised questions about how courts may view an accountability framework that disproportionately affects specific sectors. Department officials acknowledged these concerns and emphasized the importance of grounding the regulatory approach in data and statutory authority.

While the Department has indicated that negotiators may submit proposals for changes to the regulatory text through Thursday morning, the tone of Department officials suggests that they do not anticipate making significant changes to the core metrics or calculation methodology of the proposed earnings measure. 

Several negotiators have submitted proposals, including the primary negotiator for proprietary institutions, Jeff Arthur, and Aaron Lacey, the primary negotiator for private nonprofit institutions. All materials are available on the Negotiated Rulemaking for Higher Education 2025 webpage. 

• Pell eligibility recommendation (Submitted by Tamar Hoffman)
• 668.406(a))(x) Reporting Requirements (Private Loans) (Submitted by Jeff Arthur)
• GE Alternate Earnings Appeal Proposal 1-5-2025 (Submitted by Jeff Arthur)
• Appeals recommendation memo (Submitted by Tamar Hoffman)
• Proposal to Separate GE and Non-GE Regs (Submitted by Preston Cooper)
• Proposal to Require the Addition of Enrollment Intensity Data on the Program Information Website (Submitted by Preston Cooper)
• 2026-1-5 NP Accountability Recs (AS SUBMITTED) (Submitted by Aaron Lacey)
• Draft Memo on DTE for AHEAD (Submitted by Tamar Hoffman)

Day 3 of session 2 is scheduled to begin with continued discussion of Topic 4, focusing on the reporting requirements under the Student Tuition and Transparency System.

Day 1 RECAP

AHEAD reconvened on Monday to begin the second session of negotiated rulemaking. The first session concluded with consensus on proposed regulatory text establishing the new Workforce Pell program. This second session is focused on accountability regulations. Department officials emphasized in their opening remarks that the second session would be heavily data driven and focused on accountability, and that the regulatory framework under discussion is intended to “harmonize” accountability metrics across higher education.

The department provided an overview of the accountability provisions enacted in the One Big Beautiful Bill Act and how those provisions direct the development of new program-level accountability measures across postsecondary education. Officials emphasized that the intent of the framework is to focus federal student aid on programs that deliver meaningful economic outcomes for students while accounting for differences in program structure and student populations.

The Committee then turned to discussion of draft amendments to current regulations, beginning with topic 1 Accountability Technical and Conforming Changes, as well as general definitions, cohort construction, and comparison groups. These discussions are intended to establish how programs will be grouped for evaluation, how outcomes will be measured, and which students will be included in the earnings premium measure. Negotiators raised questions about treatment of small programs, aggregation of cohorts, and the selection of appropriate comparison groups to ensure statistical validity and equitable application.

Several presentations were delivered by the department to provide additional context and data to inform the Committee’s work:

• Aggregating Cohorts for Small Programs
• How are the Earnings Benchmarks Calculated
• Estimated Impact of the Program Level Earnings Test and Changes to Gainful Employment

During the presentations, the Department emphasized that the data released last week was not the final data that will be used to determine whether programs pass or fail. Final data will use the 6-digit CIP instead of the 4-digit CIP and will not be available until early 2027. Additionally, on January 2, 2026, the Department corrected the data it released, noting that a small number of post-baccalaureate certificate programs were incorrectly counted as failing. 

Discussion throughout the day also addressed how the new accountability measures would interact with existing oversight tools. In particular, negotiators previewed upcoming discussion on the department’s decision not to carry forward the debt to earnings test from the current Gainful Employment rule. Department officials indicated that a presentation scheduled for Tuesday morning will explain the rationale for excluding that measure and outline how alternative accountability metrics are intended to function in its place.

The Committee is scheduled to return Tuesday morning for that presentation, followed by review and discussion of proposals submitted by negotiators prior to the start of the second session. The department stated that it intends to hold a consensus vote on the regulatory text on Friday.