Gainful Employment Ruling Struck Down

English: Photo of Education Secretary (2009-)....

Just days after the Department of Education released Gainful Employment Informational Debt Measures and Gainful Employment Informational Loan Medians to institutions, GE is Dead!

On Saturday, United States District Judge Rudolph Contreras struck down Gainful Employment rules in a suit that the Association of Private Colleges and Universities brought against the Department of Education and Secretary Arne Duncan to challenge Gainful Employment rules.

Check out the full text of the legal decision here:


Two-Factor Authentication comes to Federal Student Aid

Did you know that more than ninety-thousand people have access to Post-Secondary School Federal Financial Aid network services? Yup. They do. This number encompasses all FSA users including personnel at schools, guarantee agencies, lenders, third-party servicers, call centers and everyone else at the Department of Education, their partners and their subcontractors. Together they service over thirteen million students and over thirty-million aid awards. And while aid administrators are generally a trustworthy bunch, FSA isn’t immune to the malicious threats which plague today’s digital world. The solution? Two-Factor Authentication.

What is Two-Factor Authentication? It’s simple, really. In order to access FSA websites like FAA Access to CPS, COD and NSLDS, users will have to use two passwords.

The first of the two “factors” is your FSA User ID and Password.

The second,  will be a one-time password generated by a token like the one depicted below. A new unique password will be generated each time a user attempts to gain access to one of the FSA system websites. Only “privileged users” of FSA network services will receive a TFA token. Just who is a privileged user anyway? Well if you are one of the more than ninety-thousand people working in Federal Student Aid, you are.

FSA - TFA Token

Last month Ed, began the phased distribution of tokens and token information to schools. While they planned an elaborate state by state deployment, Ed hasn’t been sticking to their stated schedule so it’s anyone’s guess as to when you’ll get yours. My bet, it’ll be happening sooner than you might expect.  Primary Destination Point Administrators and COD Security Administrators in group 4 and 5 on the chart below, have already begun receiving instructions from ED.

Token Deployment Schedule

Want to know more about Two-Factor Authentication? Check out the presentation from the 2011 FSA conference here: Two-Factor Authentication: Session #56


Draft Cohort Default Rates Delayed, but coming…

In a message addressed to the Financial Aid Community, Federal Student Aid announced the release dates of the  FY 2010 2-Year and FY 2009 3-Year Draft Cohort Default Rates. All schools, both domestic and foreign, enrolled in the Electronic Cohort Default Rate (eCDR) process will receive their FY 2010 2-Year and the FY 2009 3-Year Draft Cohort Default Rate and accompanying documentation via their Student Aid Internet Gateway (SAIG) mailbox.This year, the reports will be delivered separately and several days apart as follows:

  • FY 2010 2-Year Draft Cohort Default Rates – On February 27, 2012
  • FY 2009 3-Year Draft Cohort Default Rates – On March 5, 2012

Although sanctions from the 3 year Cohort Default Rate will not be imposed until 2014, many schools will review the student level data in the report to ensure the accuracy of the official Cohort Default Rate which will be published in September. In 2014, institutions that have three-year rates higher than 30 percent will face possible sanctions, including loss of eligibility to participate in Title IV programs. Trial rates project the following data by sector.

Public —10.8% overall 14.7% 17.9% 7.9%
Private7.6% overall 26.1% 16.7% 7.3%
Proprietary25.0% overall 27.6% 27.9% 22.7%
Foreign – 4.7% overall

During the Draft Cohort Default Rate Review period,schools have 45 days to challenge/appeal the rates by submitting an Incorrect Data Challenge appeal to the data manager via the eCDR appeals process. A good idea since benefits as well as sanctions apply to cohort default rate thresholds.

  • FY 2010 2-Year Incorrect Data Challenges are due – April 12, 2012
  • FY 2009 3-Year Incorrect Data Challenges are due –  April 19, 2012

For more information about Cohort Default Rates, check out the revised edition of the Cohort Default Rate Guide.

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