Program Memorandum - OVAE/DVTE - 2001-2

The Carl D. Perkins Vocational and Technical Education Act (P.L.105-332) (20 U.S.C. 2301 et seq.) (Perkins III) and the Adult Education and Family Literacy Act (Title II of the Workforce Investment Act of 1998, P.L. 105-220) (20 U.S.C. 2901 et seq.) (AEFLA) hold States accountable for reporting on, and achieving, annual performance goals for the placement and retention of students in employment, as well as a number of other student outcomes. In addition, some States have established comparable accountability requirements for State community college systems. There is growing interest among States in using State unemployment insurance (UI) wage records to determine the employment status of former students in order to fulfill these requirements. Generally, State UI wage records can provide more accurate information than mail or telephone surveys of former students. Moreover, using State UI records is less expensive than mail or telephone surveys.

The Department supports your efforts to improve the accuracy of the information that your State collects concerning student outcomes and to reduce the burden of obtaining this information. However, preserving student privacy is also required by law. As you investigate using State UI wage records to determine the employment status of students, please note that this approach requires the use of personally identifiable information from student education records. Such personally identifiable information is protected by the Family Educational Rights and Privacy Act (FERPA) (20 U.S.C. 1232g). The purpose of this memorandum is to assist you in understanding FERPA's privacy protections and how to use State UI wage records to determine the employment status of former students in accordance with FERPA. This guidance applies solely to Perkins III and AEFLA. It was developed in consultation with the Undersecretary and the Family Policy Compliance Office, which administers FERPA.

Accountability Requirements Established by Perkins III and AEFLA

Perkins III creates a State performance accountability system for vocational and technical education through which the Secretary and each eligible agency reach agreement on annual levels of performance for a number of "core indicators" specified in the law. Student "placement in, retention, and completion of, postsecondary education or advanced training, placement in military service, or placement or retention in employment" is one of these core indicators (section 113(b)(2)(iii)). Each eligible agency must use the State adjusted levels of performance to evaluate annually the activities of eligible recipients (section 123(b)). Section 113(c) of Perkins III also requires each eligible agency to submit annually a report to the Secretary regarding "the progress of the State in achieving the State adjusted levels of performance on the core indicators of performance."

AEFLA establishes a similar performance accountability system for adult education and literacy activities. The Secretary and each eligible agency reach agreement on annual levels of performance for a number of "core indicators" specified in the law, including "placement in, retention in, or completion of postsecondary education, training, unsubsidized employment or career advancement" (section 212(b)(2)(ii) of WIA). Each eligible agency must evaluate annually the effectiveness of local adult education and literacy activities using the core indicators of performance (section 224(b)(3)). States must report annually to the Secretary on "the progress of the eligible agency in achieving eligible agency performance measures, including information on the levels of performance achieved by the eligible agency with respect to the core indicators of performance" (section 212(c)).

To fulfill these evaluation and reporting requirements, a number of States have expressed interest in using State UI wage records to determine the employment status of former students. Maintained by State labor or employment security agencies, these records consist of quarterly reports of employee earnings that are submitted by employers who are required to comply with the State's unemployment compensation law. In most cases, a wage record includes at least three data elements: (1) an employee's social security number (SSN); (2) the total amount of reportable earnings paid to the employee during the quarter; and (3) the employer's unique identifier. Although Federal and State law protects the confidentiality of this information, most States have established procedures to enable other public agencies to access the information for evaluation purposes.

The employment status of a former student can only be determined from UI wage records by using the student's SSN. A student's SSN, however, is personally identifiable information that is protected by FERPA.

Family Educational and Privacy Rights Act

As you know, FERPA is a Federal law that protects an eligible student's privacy interest in his or her "education records." In particular, FERPA affords eligible students the right to inspect and review their education records, the right to seek to have the records amended, and the right to have some control over the disclosure of information from the records. The term "education records" is broadly defined as:

FERPA provides that education records, or personally identifiable information from such records, may be disclosed by educational agencies and institutions only after an eligible student provides prior written consent, except in statutorily specified circumstances. [(20 U.S.C. 1232g(b)(1) and (d). See also 34 CFR 99.30.]) "Personally identifiable information" is defined by 34 CFR 99.3 as information that "includes but is not limited to:

Because the vocational and adult education laws include identical provisions stipulating that "[n]othing in this Act shall be construed to supersede the privacy protections afforded students and parents under" FERPA (section 5 of Perkins III, section 504(a) of WIA), States must comply with FERPA in using State UI wage records.

Generally, there are three options available to State educational authorities for using State UI wage records consistent with the requirements of FERPA:

• "Importing" State UI wage records and using them internally to determine the employment status of former students;

• Obtaining the prior consent of eligible students to disclose their SSNs to the State UI agency (or other agency that has access to State UI wage records) in order to determine whether they secured or retained employment after they exited the program; and

• Authorizing the State UI agency (or other State agency that has access to UI records) to obtain student SSNs directly from local education agencies and educational institutions, determine the employment status of these students, and report the aggregate results, after which students' personally-identifiable information would be destroyed by the agency authorized to match the UI data.

"Importing" State UI Wage Records to Determine Employment Outcomes

A State educational authority may obtain State UI wage record data from the State UI agency and then use this information internally to determine the employment status of students. This approach meets the requirements of FERPA because the State educational authority has not disclosed personally identifiable information from an education record to others. State law, however, may restrict the extent to which you may share personally identifiable information derived from wage records with local education agencies and educational institutions. Providing local education agencies and educational institutions with information about the earnings of individual students, for example, may be prohibited by Federal or State law.

Obtaining Student Consent for Disclosures to the State UI Agency

FERPA permits the disclosure of protected student information if a student has consented in advance to this disclosure in writing. Thus, a State educational authority may disclose student SSNs to the State UI agency (or other agency that has access to State UI wage records) for the purpose of determining their employment status if it has secured the consent of these students for the disclosure. Requesting student consent for this disclosure, for example, may be made a regular part of the intake or admission process for vocational and adult education programs.

This written consent must be signed and dated by the eligible student and:

In addition, the State educational authority or local educational agency or institution must provide the student, upon his or her request, a copy of the records that are disclosed. (34 CFR 99.30(c)(1)). A sample consent form that you may adapt is included in Appendix A.

Authorizing a State UI Agency to Evaluate Employment Outcomes under Perkins III and AEFLA

FERPA permits the disclosure of protected student information without the prior consent of students in certain, limited circumstances. (20 U.S.C. 1232g(b); 34 CFR 99.31). One exception permits the disclosure of information derived from education records without prior consent to "authorized representatives of" the Comptroller General of the United States, the Secretary, the Attorney General or "State or local educational authorities." The disclosure must be "in connection with the audit and evaluation of Federally-supported education programs, or in connection with the enforcement of the Federal legal requirements which relate to such programs."

Thus, a State educational authority may authorize the State UI agency (or other agency that has access to State UI wage records) to be its representative for the purpose of evaluating whether local vocational and adult education programs have achieved the student employment goals established by the State under Perkins III or AEFLA. Typically, this authorization will be executed by a Memorandum of Agreement (MOA) between the two agencies. The MOA must contain, at a minimum, the following provisions required by FERPA:

1. Information disclosed by a school to an authorized representative must not be redisclosed to a third party in personally identifiable form. The information only may be redisclosed in aggregate, non-personally identifiable form.

2. The information should be destroyed when no longer needed for the purpose of the disclosure.

3. The authorized representative may have access to the records in connection only with --

• an audit or evaluation of a Federally supported education program; or

• for the enforcement of or compliance with Federal legal requirements that relate to those programs.

See 20 U.S.C. 1232g(b)(3); 34 CFR 99.35. Sample Memoranda of Agreement are included as Appendix B.

Pursuant to the MOA, the State UI or other agency may then obtain student SSNs directly from local educational agencies or educational institutions and determine the employment status of these students. It may also report the aggregate results of its evaluation to the State educational authority, but no personally identifiable information may be redisclosed in this report. We would expect that the State UI or other agency would destroy student SSNs and any other personally identifiable information at the time it makes its evaluation report to the State educational authority. In addition, FERPA also requires that each eligible recipient that discloses a student's SSN or other personally identifiable information must maintain a record of this disclosure with the education records of the student. (34 CFR 99.32)

FERPA also allows a State UI agency to obtain a student's SSN directly from the State educational authority in order to determine the student's employment status. For the purposes of complying with the reporting requirements of Perkins III and AEFLA, a State educational authority may disclose a student SSN to the State UI agency if the UI agency has been made an "agent" of the State educational authority through a written MOA. This MOA should contain the same provisions discussed above.

We hope this memorandum is helpful to you in identifying how State UI wage records may be used to determine the employment status of students in a way manner that complies with FERPA. State laws concerning the privacy of student records and UI wage information also should be reviewed carefully as you consider the options available to you. If you have further questions regarding the requirements of Perkins III and AEFLA, you may contact Mr. Braden Goetz at (202) 205-3373 or Mr. Jon Weintraub at (202) 205-5602. Please direct any further questions you may have concerning FERPA to:

Appendix A: Sample FERPA Consent Form

The following consent forms are examples that you should adapt to reflect the specific circumstances in your State.

Carl D. Perkins Vocational and Technical Education Act

I, a student at a postsecondary educational institution or a student age 18 years or older, ______________________ , consent to the release of personally identifiable information from my education records or I, parent or guardian of a student at a secondary educational institution under the age of 18, _______________ consent to the release of personally identifiable information from the education records of my son/daughter.

I understand that the records to be disclosed include my social security number and other personally identifiable information from my education records. I acknowledge that the purpose of the disclosure is to assist the _____________ State Department of Education in obtaining and reporting information concerning the placement and retention of students in employment as required by section 113 of Carl D. Perkins Vocational and Technical Education Act. I understand that the personally identifiable information will be disclosed by the educational institution only to ______________ Department of Labor / _______________ Unemployment Insurance Agency. This information may not be redisclosed to others and will be destroyed as soon as all statistical analysis has been performed, or when the information is no longer needed, whichever date comes first.

Adult Education and Family Literacy Act

I, a student at a postsecondary educational institution or a student age 18 years or older, ________________________ , consent to the release of personally identifiable information from my education records or I, parent or guardian of a student at a secondary educational institution under the age of 18, _______________ consent to the release of personally identifiable information from the education records of my son/daughter.

I understand that the records to be disclosed include my social security number and other personally identifiable information from my education records. I acknowledge that the purpose of the disclosure is to assist the _____________ State Department of Education in obtaining and reporting information concerning the placement and retention of students in employment as required by section 212 of the Adult Education and Family Literacy Act. I understand that the personally identifiable information will be disclosed by the educational institution only to ______________ Department of Labor / _______________ Unemployment Insurance Agency. This information may not be redisclosed to others and will be destroyed as soon as all statistical analysis has been performed, or when the information is no longer needed, whichever date comes first.

Appendix B: Draft Memoranda of Agreement

The following memoranda of agreement are examples that you should adapt to reflect the specific circumstances in your State.

Carl D. Perkins Vocational and Technical Education Act

MEMORANDUM OF AGREEMENT BETWEEN

_____________ STATE DEPARTMENT OF EDUCATION AND

THE ________________ DEPARTMENT OF LABOR/ THE ______________STATE

UNEMPLOYMENT INSURANCE AGENCY

This agreement, made the _________ day of ________ 2001, between the ___________ State Department of Education and the ______________ Department of Labor (Labor Department)/ State Unemployment Agency (UI Agency). The purpose of this agreement is to designate the Labor Department/UI Agency as an "authorized representative" of the __________ Department of Education (Education Department) for purposes of obtaining and reporting information concerning the placement and retention of students in employment as required by section 113 of Carl D. Perkins Vocational and Technical Education Act (Perkins III).

RECITALS:

AGREEMENT:

This agreement shall be in effect for _______ years from the date of the last signature.

Adult Education and Family Literacy Act

MEMORANDUM OF AGREEMENT BETWEEN

_____________ STATE DEPARTMENT OF EDUCATION AND

THE ________________ DEPARTMENT OF LABOR/ THE ______________STATE

UNEMPLOYMENT INSURANCE AGENCY

This agreement, made the _________ day of ________ 2001, between the ___________ State Department of Education and the ______________ Department of Labor (Labor Department)/ State Unemployment Agency (UI Agency). The purpose of this agreement is to designate the Labor Department/UI Agency as an "authorized representative" of the __________ Department of Education (Education Department) for purposes of obtaining and reporting information concerning the placement and retention of students in employment as required by section 212 of the Adult Education and Family Literacy Act (AEFLA).

RECITALS:

AGREEMENT:

This agreement shall be in effect for _______ years from the date of the last signature.