Gainful Employment | Federal Student Aid

Gainful Employment

Gainful Employment Information

Generally, in order to be eligible for funding under the Higher Education Act Title IV student assistance programs, an educational program must lead to a degree at a non-profit or public institution or it must prepare students for "gainful employment in a recognized occupation."  Therefore, with very few exceptions, any non-degree program offered by non-profit or public institutions and all educational programs offered at for-profit institutions must lead to gainful employment.

Subpart Q of the Student Assistance General Provisions establishes Debt-to-Earnings rates (D/E rates) to determine whether a gainful employment (GE) program prepares students for gainful employment in a recognized occupation.  A D/E rate is based on the typical loan debt and earnings of a cohort of the program’s former students who completed the program, usually those who completed during a two-year period concluding two years prior to the D/E rate calculation year.  This delay is to account for the ramping up of the students’ earnings upon completion of the program.

Two D/E rates, the Annual Earnings Rate and the Discretionary Income Rate, are calculated for each program as a measure of the ability of program completers to reasonably repay the educational debt incurred for their attendance in the program. 

  • For the Annual Earnings Rate, the numerator is the calculated annual loan payment amount– an estimate of the annual loan repayment amount based on the median educational debt of the members of the cohort.  The denominator is the higher of the cohort’s mean or median earnings obtained from the Social Security Administration (SSA). 
  • The Discretionary Income Rate uses the same annual loan payment amount in the numerator as the Annual Earnings Rate but the denominator is the higher of the mean or median earnings minus 150% of the poverty guideline. 

Annual Earnings Rates of less than or equal to 8% are considered passing rates.  Annual Earnings Rates greater than 8% but less than or equal to 12% are zone rates, and Annual Earnings Rates greater than 12% are failing rates.  For the Discretionary Income Rate, rates less than or equal to 20% are passing rates, rates greater than 20% but less than or equal to 30% are zone rates, and rates greater than 30% are failing rates.

Debt-to-Earnings (D/E) Rate Data

D/E rate data is available for the 2015 debt measure year.  Information on the Debt to Earnings data spreadsheet includes institution information, program information, D/E Annual Earnings Rates and D/E Discretionary Income Rates (including transitional rates for relevant programs) with the numbers used to calculate those rates, earnings data, and program appeal status.

Earnings Data

As described above, the SSA calculates and returns to the U.S. Department of Education (the Department) the mean and median annual earnings of a cohort of students who completed the GE program during a specified cohort period.  At least 10 completers from a program must be matched for SSA to return mean and median earnings information for disclosure purposes, while there must be at least 30 students in the cohort sent to SSA for the Department to calculate D/E rates. In calculating a GE program's D/E rates, the Department uses the higher of the SSA-reported mean or median earnings. SSA does not provide the Department individual earnings data or the identity of any students.

Earnings data from the 2014 calendar year is available for informational purposes only. Information on the GE program earnings data spreadsheet includes OPEID and institution name, program identifiers (Classification of Instructional Program (CIP) code, credential level, and CIP code program name), the number of completers matched with earnings data by SSA, along with both the mean and median SSA earnings for the GE program.

2011 GE Informational Rate Data

2011 GE Informational Rate data is also available. This data was prepared to provide institutions and the Department with preliminary information about the performance of institutions' GE programs based on the 2011 GE regulations, which have since been vacated.