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Department refines value-added earnings rules for online programs and flags operational questions
Summary
The Department of Education added an exception to value-added earnings adjustments for programs with predominately out-of-state students, proposed using FAFSA residence as a practical proxy for student location, and said it will publish directed questions and operational guidance to resolve multi-campus and employer-site complications.
The department detailed a change to the value-added earnings calculation intended to avoid mismeasuring programs offered primarily online or to geographically dispersed students. Under the new draft language, if more than 50% of enrolled students in a program reside outside the state where the institution is located, the department will not apply a state or regional price-parity adjustment to the program's median earnings; instead, earnings will be compared using a national parity.
David Musser said the department's operational colleagues advised the department to use a practical proxy to identify student location and proposed relying on the permanent address reported on the FAFSA in many cases. Negotiators raised multiple concerns: student and workforce representatives suggested measuring location at the time earnings are recorded (not only FAFSA address at enrollment), and institutions warned that FAFSA addresses can be inaccurate and that many institutions cannot expect students to identify branch campuses on the FAFSA. The department acknowledged the limitations and committed to a directed question in the proposed rule and further preamble discussion.
The department also said that for multi-campus institutions an approved additional location listed in institutional eligibility records (EECAR/branch location) could be used operationally to attribute program location when appropriate; department staff acknowledged this would be operationally complex and flagged the need for additional implementation guidance.
Negotiators agreed the change aims to make the value-added earnings calculation fairer for online programs and students who study across state lines; they urged the department to clarify whether student location should reflect residence when earnings are measured, the method used for campus address attribution, and how regional price parity should be calculated for programs run across multiple sites. The department will include directed operational questions and consider examples in the preamble to guide states and institutions.
