By Dan Brozovic

Beginning July 1, 2019, institutions will need to directly distribute Gainful Employment disclosures to prospective students before they enroll, and include the disclosures or links thereto in their GE program promotional materials.  Compliance will be required at least until the Department of Education’s pending changes to the GE rule take effect. Review the article below.

Direct Delivery of GE Disclosures Required Starting July 1

We recently wrote about the 2019 GE Disclosure Template, and the July 1, 2019 deadline for institutions to update their disclosures using that template. The U.S. Department of Education has now added two additional disclosure obligations to institutions’ plates.

Beginning July 1, 2019, institutions will be required to (1) directly distribute a GE disclosure to each prospective student in a GE program prior to enrollment, and (2) include the GE disclosure, or a link thereto, in all GE program promotional materials.

Special attention to the “direct distribution” requirement is warranted.  For the first time, institutions will need to document that each prospective student who enrolls in a GE program was provided a disclosure prior to their signing an enrollment agreement, completing registration, or otherwise making a financial commitment to the institution.  Written or electronic confirmation of receipt will be required.

The implementation of the “direct distribution” requirement was unanticipated, since the Department has expressed serious reservations about the requirement and the burden it places on institutions across all sectors of higher education.  Indeed, several ED-issued extensions have until now prevented the requirement from taking effect. Moreover, we expect the requirement to be removed when ED publishes its broader rescission of the GE rule – likely before November 1, 2019. However, barring any last-minute changes, we view the Department’s latest announcement as a strong indicator that schools will have to comply with the requirement, at least for some time, beginning on July 1.

We provide additional information below on these dissemination requirements and the options institutions have for meeting them.  Please do not hesitate to contact Dan Brozovic, or another Powers attorney with whom you regularly work, if you have questions or need assistance in establishing a compliant distribution process.

Direct Delivery to Prospective Students

Many will recall that while the “direct distribution” requirement was included in the Obama-era version of the GE rule published in 2014, it has never gone into effect due to a series of compliance date extensions from ED.  

The requirement appears at 34 C.F.R. § 668.412(e), and includes the following salient aspects:

  • The disclosure must be delivered to any prospective student or any third party (e.g., a parent) acting on the student’s behalf.  Disclosures need not be provided to prospective students who plan to enroll in a non-GE program the institution offers.  
  • The disclosure must be delivered before the prospective student “signs an enrollment agreement, completes registration, or makes a financial commitment to the institution.”
  • The disclosure must be provided “as a separate document,” meaning it cannot be consolidated into a larger disclosure form.  

Institutions may either hand-deliver the GE disclosures or provide them via email, and the attendant procedural and recordkeeping requirements differ based on the method used.

  • For schools choosing to hand-deliver the GE disclosures:
    • Hand-delivery may occur “individually or as part of a group presentation.”  However, even if group presentations are used, a copy of the disclosure must be given to each student (again, as a “separate document”).
    • The school must obtain “written confirmation from the prospective student or third party” that they received a copy of the disclosure template.  The rule does not specify what form “written confirmation” must take, and institutions could meet the requirement in a variety of ways.  Regardless of how you obtain confirmation, make sure the student or third party is provided a disclosure form that they can keep.
    • We suggest that schools set up their recordkeeping systems in a way that documents what specific disclosure was provided (e.g., program and disclosure version).  And because disclosures must be provided pre-enrollment, schools should record both the date and time of delivery.
  • For schools choosing to email the GE disclosures:
    • The email must be sent to the “primary email address used by the institution for communicating with the prospective student or third party about the program.”
    • The disclosure must be the “only substantive content” in the email.
    • The school must obtain “electronic or other written acknowledgement” of receipt from the prospective student or third party.  In FAQ guidance, ED noted that institutions can obtain this written acknowledgement in a variety of ways, such as an email “read receipt”, a physically or electronically signed statement confirming receipt, a link embedded in the email (which could be either a custom URL or one that leads to a page where the recipient fills in their information), etc.  If the institution receives a response that the email could not be delivered, it should use a different address or method of delivery.

In all cases, and regardless of delivery method, the institution should ensure it has a confirmation/acknowledgement of receipt in hand before permitting any student enrolling in a GE program to sign an enrollment agreement, complete registration, or make a financial commitment to the institution.  The recordkeeping aspect of this rule is important, and we advise schools to keep copies of the disclosures themselves, any confirmations of receipt, and any other emails or correspondence with students about the disclosures.

Finally, while similar, the rules for directly distributing the GE disclosures are not the same as the rules for distributing GE warnings to prospective students.  Significantly, for programs not subject to the warning requirements, institutions need not observe a three-day “cooling off” period after the disclosure is provided, nor must the disclosure be made at the “first contact” with the prospective student.

Advertisements and Promotional Materials

While likely not as onerous as the direct distribution requirement, institutions will also need to resume complying with the requirement of 34 C.F.R. § 668.412(d) to include GE disclosures, or a link thereto, in any advertisements or promotional materials that refer to a specific GE program or programs.  

Advertisements and promotional materials must contain:

  • The GE disclosure template for the program(s) referenced or promoted; or
  • If “space or airtime constraints” prevent inclusion of the full template, the school may instead provide a direct link to (or at least the non-clickable URL for) the template.  
    • The URL or link must be “prominent, readily accessible, clear, conspicuous, and direct,” though the institution may use a URL shortener on character-limited platforms like Twitter.  Also, when materials refer to multiple GE programs, the URL or link can lead to a centralized page with links to all disclosures.
    • In addition, the URL or link must be identified as “Important Information about the educational debt, earnings, and completion rates of students who attended this program,” unless the Department provides different language in a Federal Register notice.  (The Department has not published any such replacement language as of this posting. While the current language is arguably somewhat out-of-date, we would continue to use it until ED instructs differently.)

The requirement applies to any promotional materials that “identify a GE program by name or otherwise promote the program.”  Promotional materials include, but are not limited to, catalogs, invitations, flyers, billboards, and advertising through any medium (radio, television, print media, internet, social media, etc.).

The requirement also applies to any promotional materials made available “on behalf of” the institution, so schools working with outside marketing vendors should ensure their vendors are aware of, and comply with, this requirement.