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The advocacy group Student Defense, on behalf of the American Federation of Teachers, sued Education Secretary Betsy DeVos in a California federal court yesterday, seeking the restoration of an Obama administration rule mainly targeting for-profit colleges.
Under the 2014 rule, mostly for-profit programs faced the loss of federal student aid if graduates racked up substantially more debt than they earned in the jobs they got. In the first gainful-employment ratings released in 2017, 98 percent of programs that failed the standards were operated by for-profit institutions. However, for-profit college advocates and DeVos said the rule discriminated against programs because of their tax status. DeVos in July repealed the rule, drawing the ire of advocacy groups, which said it removed protections for students against low-quality for-profit schools.
In the suit, filed Wednesday in the United States District Court for the Northern District of California, Student Defense and the teachers' union alleged the department made a number of legal errors in repealing the rule. “It is rare for a federal agency to publish a rule that is so replete with errors, makes so many unsubstantiated assertions, and takes so many unlawful shortcuts,” the suit said.
“Predatory for-profit colleges have been trying to escape accountability for years, and Secretary DeVos was only too happy to help them,” Aaron Ament, the president of Student Defense, said in a news release. “With this lawsuit we are going to strike down DeVos’ illegal repeal of the gainful employment rule and protect students from schools that leave borrowers with worthless degrees and debt they can never repay.”
A department spokeswoman said in an email that the "department will vigorously defend its final regulation rescinding this deeply flawed rule.”
Steve Gunderson, president and CEO of Career Education Colleges and Universities, which represents for-profit institutions, called for equitable standards for nonprofits as well as for-profits in a statement. "If AFT and Student Defense were serious about their missions, they would look past politics and support a fair standard for all," he said in a statement.
Attorneys general in 18 states sued the department when the Trump administration stopped enforcing the rule. The suit Wednesday was the first to challenge the formal repeal of the rule.
