To remain eligible for Title IV student aid program funds under the Higher Education Act, vocational programs of training at non-profit and for-profit institutions are required by statute to prepare students for gainful employment in a recognized occupation. Examples of these programs include training in auto mechanics, cosmetology, culinary arts, and heavy equipment operation.
- To pass the debt-to-earnings rates measure, the GE program must have a discretionary income rate less than or equal to 20 percent OR an annual earnings rate less than or equal to 8 percent.
- The regulations also establish a zone for GE programs that have a discretionary income rate greater than 20 percent and less than or equal to 30 percent or an annual earnings rate greater than 8 percent and less than or equal to 12 percent.
- GE programs with a discretionary income rate over 30 percent and an annual earnings rate over 12 percent will fail the D/E rates measure.
- Under the regulations, a GE program becomes ineligible for title IV, HEA program funds, if it fails the debt-to-earnings rates measure for two out of three consecutive years, or has a combination of debt-to-earnings rates that are in the zone or failing for four consecutive years.
- U.S. Department of Education's webpage on gainful employment.
- U.S. Department of Education's (Information for Financial Aid Professionals) Gainful Employment Website: This page provides the most updated information pertaining to requirements for Title IV eligible educational programs that are required to lead to gainful employment in a recognized occupation. It includes links to regulations, Dear Colleague letters, FAQs, webinars, and other resources.
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