§ 668.403 - Gainful employment program framework.

§ 668.403 Gainful employment program framework.

(a) General. A program provides training that prepares students for gainful employment in a recognized occupation if the program -

(1) Satisfies the applicable certification requirements in § 668.414; and

(2) Is not an ineligible program under the D/E rates measure.

(b) Debt-to-earnings rates (D/E rates). For each award year and for each eligible GE program offered by an institution, the Secretary calculates two D/E rates, the discretionary income rate and the annual earnings rate, using the procedures in §§ 668.404 through 668.406.

(c) Outcomes of the D/E rates measure.

(1) A GE program is “passing” the D/E rates measure if -

(i) Its discretionary income rate is less than or equal to 20 percent; or

(ii) Its annual earnings rate is less than or equal to eight percent.

(2) A GE program is “failing” the D/E rates measure if -

(i) Its discretionary income rate is greater than 30 percent or the income for the denominator of the rate (discretionary earnings) is negative or zero; and

(ii) Its annual earnings rate is greater than 12 percent or the denominator of the rate (annual earnings) is zero.

(3) A GE program is “in the zone” for the purpose of the D/E rates measure if it is not a passing GE program and its -

(i) Discretionary income rate is greater than 20 percent but less than or equal to 30 percent; or

(ii) Annual earnings rate is greater than eight percent but less than or equal to 12 percent.

(4) For the purpose of the D/E rates measure, subject to paragraph (c)(5) of this section, a GE program becomes ineligible if the program either -

(i) Is failing the D/E rates measure in two out of any three consecutive award years for which the program's D/E rates are calculated; or

(ii) Has a combination of zone and failing D/E rates for four consecutive award years for which the program's D/E rates are calculated.

(5) If the Secretary does not calculate or issue D/E rates for a program for an award year, the program receives no result under the D/E rates measure for that award year and remains in the same status under the D/E rates measure as the previous award year; provided that if the Secretary does not calculate D/E rates for the program for four or more consecutive award years, the Secretary disregards the program's D/E rates for any award year prior to the four-year period in determining the program's eligibility.

(Authority: 20 U.S.C. 1001, 1002, 1088)