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Regulation | 3 Months Ended
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Mar. 31, 2014
Regulation [Abstract] |
Regulation |
10. | Regulation
The Department of Education previously attempted to define “an eligible program of training to prepare students for gainful employment in a recognized occupation.” After a federal court invalidated the Department’s regulation (except for the disclosure requirements), the Department established a negotiated rulemaking committee to again consider the issue of gainful employment, and appointed Strayer University’s General Counsel to serve on the Committee. The Committee did not achieve the required consensus. On March 25, 2014, the Department issued a Notice of Proposed Rulemaking for public comment. Under the proposed rule, a gainful employment program would pass the metrics if:
· | The estimated annual loan payment of graduates does not exceed 20 percent of their discretionary earnings or 8 percent of their total earnings; and
· | The program cohort default rate for former students enrolled in the program does not exceed 30 percent.
The proposal would also establish a “zone” for gainful employment programs that have a discretionary income rate between 20 percent and 30 percent, or an annual earnings rate between 8 percent and 12 percent. A gainful employment program would become ineligible for Title IV funding 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. Additionally, a gainful employment program that has a program cohort default rate of 30 percent or greater for three consecutive fiscal years would become ineligible. Institutions would also be required to disclose to students and prospective students certain information about gainful employment programs and to report to the Department certain data relating to gainful employment programs. At this time, the Company is unable to determine what impact, if any, a final rule will have on its financial condition or results of operations.

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