Financial Value Transparency (FTV) is the distribution of information regarding costs and possible earnings relative to higher education. Gainful employment (GE) refers to a student’s ability to go into their preferred occupation that enables them to achieve financial stability and repay loans from their education. The Federal Register will now implement various requirements and regulations …
Financial Value Transparency (FTV) is the distribution of information regarding costs and possible earnings relative to higher education. Gainful employment (GE) refers to a student’s ability to go into their preferred occupation that enables them to achieve financial stability and repay loans from their education. The Federal Register will now implement various requirements and regulations related to FTV and GE in order to ensure students are given the valuable information needed to make informed choices about school programs and general education. In this blog, we will explore the requirements of FVT & GE, the various types of data used to evaluate implementation success, and the desired student outcome.
Financial Value Transparency is a framework used to enhance the quality, transparency, and availability of financial information to students for a better understanding of their financial consequences when making educational choices (such as degree programs). The purpose of FVT is to protect students, improve higher education outcomes, and provide important information to assist them in making informed decisions related to finances. This framework is set to be established in the majority of academic programs at postsecondary institutions. This framework will also provide institutions with information such as performance to compare with different programs and help students understand the value and success of each program.
Gainful Employment is a term used to describe employment that provides individuals with adequate income to support themselves and their dependents, allowing them to meet their basic needs and maintain their standard of living. It surrounds occupations that offer security, stability, and opportunities for professional and personal advancement.
Congress emphasized the value of adding the Gainful Employment programs to the Federal Student loan program, as well as Title IV of the HEA, which relates more broadly to financial outcomes. The implementation of this framework will help prepare students for gainful employment in their field of choice and establish administrable measures related to student financial outcomes. These measures will evaluate GE program title IV, HEA program fund eligibility, debt management, and enhanced earnings. This ensures that eligible programs grant students the ability to complete their education with affordable debt, receive livable earnings from their occupation, and mitigate risks of financial failure.
The Federal Register will require the Financial Value Transparency and Gainful Employment programs to be effective July 1, 2024.
Institutions will need to annually report two data types to the department:
Each data type must include program-specific and student-specific information, and institutions must provide this information for every eligible program. The deadline for the required reporting is October 1, 2024.
It is required that public and private institutions post the Department’s program information website link on all relevant web pages which essentially makes it easy for institutions to meet this requirement. Institutions will also be required to give current and prospective students a warning if the program they are enrolled in has not passed the department standards, academic and financial options, credit transferability, and other relevant information.
This regulatory action of both the Financial Value Transparency and Gainful Employment framework will increase the availability of information about student outcomes and define the preparation that students need for gainful employment. These requirements were implemented by regulatory bodies such as the Federal Register to address specific concerns and achieve specific objectives in areas of financial accountability and education. Here are specific reasons why these requirements were implemented.
It’s also important to note that these regulations will play a critical role in addressing and mitigating risks associated with for-profit scam institutions. These requirements will benefit students by protecting them from fraudulent practices by ensuring their respective educational programs provide value and result in employment opportunities.
In general, the two requirements will create a huge positive impact on students, protecting them from low-quality institutions with poor outcomes and ensuring that outcomes are included as a key point of competition for high-quality institutions.
Gainful Employment programs are non-degree programs (such as certificate and diploma programs) offered at institutions that are designed to train and provide students with specific knowledge and skills needed to secure employment for their occupation upon graduation. These training services are available for a wide range of fields such as business administration, nursing, cosmetology, and dental assisting.
There are over 120,000 degree programs at both public and private nonprofit institutions, with the majority of these programs being available at public institutions, and they serve over 16.3 million students who qualify for financial assistance (Title IV/HEA aid) every year. This comes to an estimate of over $20 billion in grants and over $60 billion in loans.
Number of GE Programs (Public) by CIP2, Credential Level, and Control
Undergraduate Certificates | Post-Baccalaureate Certificate | Graduate Certificate | |
|---|---|---|---|
Engineering | 98 | 31 | 62 |
Education | 461 | 222 | 494 |
Agriculture & Related Sciences | 375 | 4 | 3 |
Computer & Information Sciences & Support Services | 1,479 | 28 | 64 |
This table represents the number of GE programs for the year 2022 by credential level, CIP code, and institutional control. There is a large number of programs for engineering for the graduate certificate category whereas Agriculture & Related Sciences have the least. This implies that there are more gainful employment opportunities for STEM and Social Science majors.
Number of Non-GE Programs (Public) by CIP2, Credential Level, and Control
Assoc. | Bach. | Master's | Doct. | Prof. | |
|---|---|---|---|---|---|
Engineering | 516 | 1,556 | 1,243 | 719 | 15 |
Education | 975 | 1,158 | 2,204 | 641 | 36 |
Agriculture & Related Sciences | 693 | 507 | 267 | 143 | 1 |
Computer & Information Sciences & Support Services | 1,986 | 857 | 460 | 126 | 1 |
This table represents the number of non-GE programs for the year 2022 by credential level, CIP code, and institutional control. The largest number of non-GE programs in the Bachelor degree category is Engineering while the lowest is Agriculture & Related Sciences. This implies that these educational programs do not provide students with the skills and knowledge necessary for securing employment in their respective fields.
The implementation of FVT and GE requirements has big implications for higher education institutions and universities. Once the regulation becomes effective, institutions will be required to be transparent about the outcomes, costs, and quality of their educational programs by providing accurate information about tuition, financial aid, employment outcomes, graduation rates, and student loan debt levels. Here are more specific implications for universities:
Student Success: Institutions receive incentives by prioritizing student outcomes and success which include job placement rates, graduation rates, and earnings potential.
Program Evaluation: Institutions and universities are encouraged to evaluate and improve the quality of their educational programs regularly by assessing the curriculum effectiveness, enhancing student support services, and modernizing course curricula to meet industry demands.
Reputation and Risk Management: Institutions will be required to monitor and manage possible risks associated with gainful employment requirements, such as financial aid eligibility for underperforming programs, as well as constantly communicate with stakeholders such as students regarding FVT and GE outcomes.
Financial Aid Guidance: The enhancement of financial aid guidance and advising services may be needed to help students make informed decisions regarding their educational financing options. These advising services include budgeting, student loan borrowing, and financial literacy.
Institutions should aim to support students through Career Center services to prepare students with lucrative job application processes (i.e. finance and tech) which are more difficult and have higher job prospects and overall aid in the preparation for employment. These services include but are not limited to career counseling, Job search resources, Internship programs, networking events, mock interviews, professional development workshops, and resume and cover letter reviews.
Institutions might also be more inclined to teach STEM majors such as computer science, finance, and engineering as opposed to liberal arts. STEM occupations are often associated with high-paying and high-demand jobs that continue to grow and require a skilled workforce, emphasizing the teaching of STEM courses will help meet this demand and prepare students for huge growth opportunities.
Internships are a major aspect for college students and obtaining real-world experience makes a big difference as students enter their senior year of university. Earning this type of experience enhances the skills of the student as well as creates a competitive advantage. Universities can aid students in securing internships by offering a wide range of resources such as career fair events, career advising, employer connections, and internship placement services.
Financial Value Transparency and Gainful Employment requirements have significant impacts on students, especially in terms of understanding the benefits and costs of their education and preparation for their future careers. Here are a few major impacts:
Cost Awareness and Comparison: The requirement for detailed information regarding tuition, fees, and financial aid options helps students and families make informed decisions on the affordability of higher education. Students can also compare the outcomes and costs of different institutions and programs to choose the one that best aligns with their financial and academic goals.
Career Preparation: GE requirements can ensure that students are prepared for gainful employment through educational programs that will teach the necessary skills and knowledge to secure a job in their respective fields upon graduation.
Student Debt Considerations: GE regulations address student loan debt by observing graduates debt to debt-to-earnings ratios. This information will assist students with assessing the possible financial risks associated with student loans and how to be a responsible borrower.
Quality Assurance: The accountability standards that educational programs are held at, such as relevance to the workforce and effectiveness, enable students to feel more confident with the programs they choose.
These standards, requirements, and regulations provide clarity on the value of a college education, making it more challenging for online and for-profit institutions to entice students with deceptive and lower-value educational offerings.
Median Earnings, Workers in Labor Force Age 25-34
Credential | Overall | Private Sector | Government | Nonprofit Sector |
|---|---|---|---|---|
High School or Equivalent | $25,453 | $25,569 | $31,961 | $21,582 |
Associate Degree | $32,049 | $31,961 | $39,200 | $32,580 |
Bachelor’s Degree | $45,811 | $48,870 | $44,638 | $40,725 |
Graduate Degree | $49,639 | $52,147 | $47,941 | $45,000 |
The future of Financial Value Transparency and Gainful Employment could have a dramatic effect on the landscape of higher education. The implementation of these regulations will require institutions and universities to be transparent about finances, job placement data, graduation rates, and other necessary information. This will likely increase competition among institutions across all of these categories, and that will have numerous knock-on effects.
Universities will need to maintain the modernity of their program curriculum to make sure they align with the evolving needs of the workforce. There will likely be an increase in investments toward student support services, such as career centers and academic advising, to support students in navigating their educational journey and succeeding professionally. Universities will need to prioritize equity, diversity, and inclusion efforts to ensure all students receive equitable opportunities.
Postsecondary institutions will also most likely emphasize career readiness and development, ensuring students gain the necessary skills to compete in the workforce.
Both universities and postsecondary institutions will likely find themselves facing a more apples-to-apples comparison with trade schools and similar programs that emphasize job outcomes.
With the transparency of financial value, students and families will be able to understand college Return on Investment (ROI). Here is a short list of the importance of understanding college ROI benefits:
Financial Planning: College is a huge financial investment, and understanding ROI benefits students and families by exploring the costs of higher education such as tuition, living expenses, fees, and financial aid which can help students create financial plans to budget accordingly.
Cost-Benefit Analysis: ROI enables students and families to evaluate the expenses of college attendance against the potential benefits of future income and employment opportunities. Comparing the expected ROI between colleges and programs supports students in determining where to invest their money and time.
Decreased Student Debt: College ROI can help students make decisions that can minimize and decrease financial burden after graduation by selecting colleges and programs with higher ROI.
Maximizing Value: The understanding of ROI helps students maximize the value of their educational investment by researching institutions and programs that offer the best affordability, quality, and return.
Financial Value Transparency and Gainful Employment requirements were created to bring positive changes to the outlook of higher education in America today. These requirements will greatly benefit and empower students by providing vital information to help them make informed decisions regarding their education and career goals. Universities and institutions will face greater pressure and accountability in ensuring their programs meet the requirements of both frameworks, as well as ensure the preparation of student success in the workforce. There will also be plenty of room for growth and adaptations for individuals such as students and employers. The pursuit of accountability, transparency, and quality in higher education will positively shape the future of the overall educational experience and opportunities available to students.
