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Groups Urge Appellate Court to Protect Students, Uphold Department of Education ‘Gainful Employment’ Rule

Nov. 24, 2015

Groups Urge Appellate Court to Protect Students, Uphold Department of Education ‘Gainful Employment’ Rule

Department of Education Regulation Curbs Abuses by Predatory For-Profit Colleges

WASHINGTON, D.C. – A U.S. Department of Education rule designed to protect students from poor-performing career training programs, most of which are at for-profit colleges, should be upheld, 28 groups told the U.S. Court of Appeals for the District of Columbia Circuit in an amicus brief filed today. The groups advocate for students and college access, civil rights, veterans, educators and consumers, and are represented by Public Citizen, along with the Leadership Conference for Civil and Human Rights and the NAACP Legal Defense & Educational Fund.

The Association of Private Sector Colleges and Universities (APSCU), the largest trade association of for-profit colleges, is appealing a federal district court ruling that upheld the “gainful employment” rule, as the government and 28 groups had urged. APSCU also is lobbying Congress to block the regulation by including a “rider” in the spending bills under negotiation. The U.S. House and Senate education appropriations bills include such a rider, but more than 50 organizations have written to Congress opposing its inclusion in the final omnibus spending bill.

The rule is designed to address overwhelming evidence that some career training programs, particularly at for-profit institutions, fail to prepare students for jobs that would enable them to repay their federal loans and leave some students worse off than before they considered going to college. 

“The for-profit education industry has saddled many students with a lifetime of debt often ending in default, with devastating consequences for those students,” said Julie Murray, an attorney with Public Citizen who drafted the brief. “The groups that filed this brief are extremely concerned that some career training programs that target students of color, low-income students, veterans and others are exploiting students. The career training programs’ predatory actions must be stopped.”

The rule requires programs whose students receive certain federal student aid, such as Stafford loans or Pell grants, to demonstrate that their debt-to-earnings rates – which measure graduates’ debt burden relative to their earnings – meet certain thresholds.

On appeal, APSCU and the U.S. Chamber of Commerce claim that the gainful employment rule is arbitrary and capricious because the Department of Education failed to evaluate seriously the harm that the rule’s debt-to-earnings rate requirements will impose on students and on for-profit institutions. These claims are erroneous, however, and based on a cherry-picked and self-serving reading of the Department of Education’s rulemaking, the groups on the amicus brief maintain. The amicus brief explains that APSCU disregards portions of the rulemaking analysis that consider the rule’s impact on students and for-profit institutions.

APSCU and the Chamber also assume that students and the public would be better served if students stay in programs that fail the rule’s debt-to-earnings measures than if those programs were deemed ineligible. However, a large record of evidence – from congressional findings to state attorney general investigations – shows that many for-profit schools have harmed students, preying on underserved populations and burdening many students with a lifetime of debt. Many students leave for-profit institutions without graduating, and many graduates have high debt, low earning potential and few job prospects, leading to high rates of student loan default.

 “For-profit colleges are wildly claiming the gainful employment rule will harm students, when in reality it is critical to protecting students from some of the worst career training programs,” Murray said. “The abusive practices have been going on far too long. The gainful employment rule needs to be upheld in its entirety.”

Learn more about the case.