19 attorneys general sue Education Secretary Betsy DeVos over gainful employment rule

·Reporter

June 24, 2020 at 4:51 PM·6 min read

This story has been updated to include comment from the Department of Education.

Nineteen U.S. attorneys general are suing Education Secretary Betsy DeVos for overturning an Obama-era rule designed to protect students from predatory higher education institutions.

The 2014 gainful employment rule was created by the Obama administration to ensure that schools — many of them for-profit colleges — were denied access to federal aid if their graduates had weak career prospects and heavy debt loads.

DeVos repealed the rule in July 2019, and her decision goes into effect on July 1.

On June 24, attorneys general of the states of Pennsylvania, Maryland, Colorado, New Jersey, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia and Wisconsin, as well as the District of Columbia sued Betsy DeVos and her agency. The lawsuit was filed in U.S. District Court in D.C.

“Betsy DeVos’s unjustified and illegal repeal of the Gainful Employment rule is yet another example of the Trump Administration’s continued efforts to dismantle critical safeguards protecting students and taxpayers in order to further the interests of for-profit colleges,” New York Attorney General Letitia James said in a statement.

U.S. Education Secretary Betsy DeVos testifies before the House Education Committee on "Examining the Policies and Priorities of the U.S. Department of Education" on Capitol Hill in Washington, U.S., May 22, 2018. REUTERS/Leah Millis — U.S. Education Secretary Betsy DeVos testifies before the House Education Committee on Capitol Hill in Washington, U.S., May 22, 2018. (PHOTO: REUTERS/Leah Millis)

James added: “We are standing up for students and calling out the Department of Education’s improper repeal of a rule that plays a vital role in ensuring students can make informed decisions about their education. The Trump administration’s actions here are just another example of putting special interests ahead of student interests.”

In response to the lawsuit, press secretary Angela Morabito stated simply: “The Department will vigorously defend its final regulation rescinding this deeply flawed rule.”

Advocates expect the latest lawsuit to generate momentum to reverse the rule, or create more accountability measures.

“Now more than ever, students need to know that their investment in higher education will lead to a brighter economic future,” Student Defense President Aaron Ament said in a statement. “Secretary DeVos’s illegal repeal of the Gainful Employment Rule is a betrayal of students and a handout to owners of predatory schools.”

Randi Weingarten, president of the teachers’ union American Federation of Teachers, added: “Betsy DeVos has already made history as one of the most unproductive, unpopular and frankly embarrassing cabinet appointments — and today, states across the country are holding her to account.”

‘Leaving the Department without any meaningful way to enforce’

The for-profit higher education sector saw tremendous growth after the 2008 Crisis. In 2016, the New York Fed noted that enrollment at these schools had “skyrocketed” as the country emerged out of the Great Recession.

Debt levels rose ballooned over the following decade, and students graduating from for-profit institutions generally hold far higher levels of debt than those attending other institutions.

The gainful employment rule addressed this imbalance by requiring schools’ graduates to have loan payments that were less than 8% of their total income or 20% of their discretionary income, as The New York Times explained in 2014.

The Obama-era ED estimated that as of 2014, 1,400 programs serving 840,000 students — 99% of whom were at for-profit institutions — would not pass the accountability standards under the gainful employment rule. By 2020, the Trump-era ED defended its repeal of the rule.

Attorneys general of several states and others pushed back on the repeal, stating that the move made it much easier for predatory for-profit institutions to exploit students.

SANTA ANA, CA - APRIL 27: A security guard inside Everest College keeps away a member of the media and a former student Gary Montano after the embattled for-profit Santa Ana school was shut down along with 28 others on Monday. Montano, 30 who graduated two years ago, was trying to collect his transcripts and diploma. "Now I can't walk in. You'd think they'd want to help me out to clear their name," he said. ///ADDITIONAL INFORMATION: √ê 4/27/15 √ê MINDY SCHAUER, - corinthian.0428 shot:042715 Corinthian Colleges Inc. shuts down its remaining 28 for-profit career schools, including Everest in Santa Ana, ending classes for about 16,000 students, in the biggest collapse in U.S. higher education. (Photo by Mindy Schauer/Digital First Media/Orange County Register via Getty Images) — A security guard inside Everest College keeps away a member of the media and a former student after the embattled for-profit Santa Ana school was shut down along with 28 others. (PHOTO: Mindy Schauer/Digital First Media/Orange County Register via Getty Images)

Some attorneys general sued DeVos in 2017, alleging that she illegally delayed the implementation of the 2014 rule. In January 2020, the country’s second-largest teachers’ union sued DeVos for reversing the gainful employment rule. And California Attorney General Becerra, who is not part of the new lawsuit, also brought a lawsuit against DeVos for overturning the rule.

“The Repeal Rule eliminated the standard employed under the GE Rule to evaluate whether programs prepared students for gainful employment ... did away with the warnings that failing programs owed to current and prospective students ... [and] did not create any replacement mechanisms, leaving the Department without any meaningful way to enforce the gainful employment provision,” the lawsuit stated.

Reversal allows ‘for-profit schools to steer students into useless programs’

The attorneys general also expressed concerns over a possible resurgence in the for-profit education sector amid the coronavirus-induced recession.

“Before the GE Rule, scores of students took on loans to enroll in programs that offered a worthless education, a key contributor to a national student debt crisis. In egregious cases, students’ harmful enrollment decisions were the consequence of unscrupulous recruiting practices by predatory for-profit institutions,” they stated in the lawsuit.

“In the current economic downturn, there is a large pool of people eager to pursue educational opportunities that will help advance or restart their career,” the lawsuit added. “But with the Repeal Rule, the Department has reverted to the conditions that allowed for-profit schools to steer students into useless programs.”

There are over 2.3 million coronavirus cases in the U.S. (Graphic: David Foster/Yahoo Finance)

And due to the fact that ED has not replaced the gainful employment rule with an alternative, they argued, the repeal is “arbitrary, capricious, and contrary to law.”

“With the economic downturn causing many of our residents to reevaluate their careers and consider returning to school, it’s hard to imagine a worse time to eliminate protections for students who are seeking to improve their job prospects,” New Jersey Attorney General Gurbir S. Grewal said in a statement. “Yet the U.S. Department of Education is doing just that, so that it can send more taxpayer money to for-profit schools that push high-cost, low-value educational programs and saddle students with unaffordable debt.”

—

Aarthi is a writer for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

Read more:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Associated Press
China says US is 'playing with fire' after latest military aid for Taiwan
The Chinese government protested Sunday the latest American announcements of military sales and assistance to Taiwan, warning the United States that it is “playing with fire.” U.S. President Joe Biden authorized Saturday the provision of up to $571 million in Defense Department material and services and in military education and training for Taiwan. Separately, the Defense Department said Friday that $295 million in military sales had been approved.
TODAY
Here’s what to do if you win the Mega Millions jackpot
The next drawing for the Mega Millions jackpot of $8325 million will take place December 20 Here's what to do if you win.
Associated Press
Isolated Chicago communities secure money for a coveted transit project before Trump takes office
Adella Bass dropped her in-person college classes because it was just too hard to get there from the far South Side of Chicago, where the city's famous elevated train doesn't run. The Biden administration notified Congress last week that it would commit $1.9 billion toward a nearly $5.7 billion project to add four new L stations on the South Side, the Chicago system’s largest expansion project in history. The pledge, which the Federal Transit Administration is expected to formally sign before President Joe Biden leaves office in January, essentially locks in current and future funding.
AFP
Minorities fear targeted attacks in post-revolution Bangladesh
For generations, the small Hindu temple outside the capital in Muslim-majority Bangladesh was a quiet place to pray -- before arsonists ripped open its roof this month in the latest post-revolution unrest."My son saw the flames and doused them quickly," said temple custodian Ratan Kumar Ghosh, 55, describing how assailants knew to avoid security cameras, so they tore its tin roof open to enter.
Associated Press
Winter is hitting Gaza and many Palestinians have little protection from the cold
Winter is hitting the Gaza Strip and many of the nearly 2 million Palestinians displaced by the devastating 14-month war with Israel are struggling to protect themselves from the wind, cold and rain. There is a shortage of blankets and warm clothing, little wood for fires, and the tents and patched-together tarps families are living in have grown increasingly threadbare after months of heavy use, according to aid workers and residents. Shadia Aiyada, who was displaced from the southern city of Rafah to the coastal area of Muwasi, has only one blanket and a hot water bottle to keep her eight children from shivering inside their fragile tent.
CBS News
NYPD chief resigns amid sexual misconduct claims
NYPD Chief of Department Jeffrey Maddrey has resigned following allegations of sexual misconduct, the department says.
Associated Press
As flooding becomes a yearly disaster in South Sudan, thousands survive on the edge of a canal
Long-horned cattle wade through flooded lands and climb a slope along a canal that has become a refuge for displaced families in South Sudan. “Too much suffering,” said Bichiok Hoth Chuiny, a woman in her 70s. Such flooding is becoming a yearly disaster in South Sudan, which the World Bank has described as “the world’s most vulnerable country to climate change and also the one most lacking in coping capacity."
CNN
Two US Navy pilots eject safely over Red Sea after fighter jet shot down in apparent friendly fire incident
Two US Navy pilots ejected safely after their fighter jet was shot down over the Red Sea on Saturday in an apparent friendly fire incident, US Central Command said in a statement.
AFP
Iraq's prohibition zeal threatens Baghdad's boozy subculture
The smell of dampness rises through the dust at a private club in central Baghdad, one of many shut in a crackdown on alcohol sales in Iraq.Several private "social" clubs that have operated in Baghdad for decades were sent official letters in November forbidding them from manufacturing and serving alcoholic beverages.
Associated Press
Two US Navy pilots shot down over Red Sea in apparent 'friendly fire' incident, US military says
Two U.S. Navy pilots were shot down Sunday over the Red Sea in an apparent “friendly fire” incident, the U.S military said, marking the most serious incident to threaten troops in over a year of America targeting Yemen's Houthi rebels. The U.S. military had conducted airstrikes targeting Yemen’s Houthi rebels at the time, though the U.S. military’s Central Command did not elaborate on what their mission was and did not immediately respond to questions from The Associated Press.
AFP
Tunisia women herb harvesters struggle with drought and heat
On a hillside in Tunisia's northwestern highlands, women scour a sun-scorched field for the wild herbs they rely on for their livelihoods, but droughts and rising temperatures are making it ever harder to find the precious plants.Wildfires fuelled by drought and rising temperatures have ravaged these woodlands, further diminishing the natural resources that women like Soudani depend on.
AFP
Trump threatens to take back control of Panama Canal
Incoming US president Donald Trump on Saturday slammed what he called unfair fees for US ships passing through the Panama Canal and threatened to demand control of the waterway be returned to Washington.He continued that if Panama could not ensure "the secure, efficient and reliable operation" of the channel, "then we will demand that the Panama Canal be returned to us, in full, and without question."
Politico
Trump taps billionaire Houston Rockets owner Tilman Fertitta as Italy ambassador
Fertitta has never held political office but is a longtime GOP donor — including to Trump’s Save America PAC.
Associated Press
The water was their livelihood. Now Thailand's sea nomads work to preserve a vanishing way of life
When Hook was a child, he started his days by jumping off the boat that his family lived on and into the ocean. Now Hook, whose full name is Suriyan Klathale, lives on land like the rest of his community, a people known as the Moken. The recollections of his childhood, which many Moken of his generation still have, are mostly just memories.
Associated Press
Fleeing motorist is dead after driving into Texas shopping mall and injuring 5
A fleeing motorist drove a pickup truck into a busy JCPenney store in Texas on Saturday, injuring five people before he was fatally shot by law enforcement, authorities said. Four of the injured people were taken from the Killeen mall to hospitals and the fifth went on their own, Sgt. Bryan Washko of the Texas Department of Public Safety said in an evening media briefing. Ofelia Miramontez of the Killeen Police Department said the incident began with calls about an erratic driver in a black pickup in Belton, about 20 miles (30 kilometers) away.
Reuters
Trump says he might demand Panama hand over canal
President-elect Donald Trump on Saturday accused Panama of charging excessive rates for use of the Panama Canal and said that if Panama did not manage the canal in an acceptable fashion, he would demand the U.S. ally hand it over. In an evening post on Truth Social, Trump also warned he would not let the canal fall into the "wrong hands," and he seemed to warn of potential Chinese influence on the passage, writing the canal should not be managed by China. It also underlines an expected shift in U.S. diplomacy under Trump, who has not historically shied away from threatening allies and using bellicose rhetoric when dealing with counterparts.
AFP
In ruined homes, Palestinians recall Assad's torture
School lessons ended in Syria's biggest Palestinian refugee camp on October 18, 2012, judging by the date still chalked up on the board more than a decade later.According to the United Nations agency for Palestinian refugees, UNRWA, at the start of Syria's conflict in 2011 it was home to 160,000 registered refugees.
CNN
How a teenager’s holiday romance led to prison time in Dubai
British citizen Marcus Fakana, 18, is facing a one-year prison sentence for his summer romance with a London teenager, 17, who he met while on holiday in the United Arab Emirates.
Politico
Biden could foil Trump’s plans to resume federal executions
The president is considering using his clemency power to convert federal death sentences to life in prison.
NBC News
Lara Trump says she's removed her name from contention to be Florida's senator
Lara Trump, President-elect Donald Trump's daughter-in-law, said on Saturday that she decided to remove her name from consideration to be a senator in Florida.

‘Leaving the Department without any meaningful way to enforce’

Reversal allows ‘for-profit schools to steer students into useless programs’

Latest Stories