AG Racine Joins 18-State Coalition Fighting Trump Repeal Of Critical Protections For Students Considering For-Profit Schools

Dept. of Education Seeks to Eliminate Disclosures on For-Profit School Costs, Employment Rates

WASHINGTON, D.C. – Attorney General Karl A. Racine today filed a lawsuit with 18 other Attorneys General to stop U.S. Education Secretary Betsy DeVos from eliminating critical protection for students considering enrolling in for-profit colleges and vocational schools. The Trump administration is trying to repeal the Gainful Employment Rule, which requires schools to disclose important information about the value of their degrees—like job placement rates and debt-to-income ratios—to would-be borrowers. The coalition’s lawsuit seeks to block the administration’s Repeal Rule, which would give schools a license to take advantage of students looking to find educational programs to help advance their careers.

Background
For years, for-profit colleges have used deceptive marketing to convince students to enroll in useless programs that leave them saddled with piles of debt and no jobs to pay off that debt. In 2014, the Department of Education issued the Gainful Employment Rule, which required that vocational programs at for-profit colleges and certain programs at community colleges meet certain standards. The standards aimed to ensure that students’ debt-to-income ratio is sustainable after they complete their education, and discouraged schools from trading in false promises about earning potential or average levels of debt associated with the degrees they offer. The rule also forbid programs that did not meet the standards from enrolling students using federal financial aid.

The coalition argues that the Repeal Rule will injure states and taxpayers in several important ways:

  • Taxpayer money will fund predatory, for-profit programs: Without disclosure protections from the Gainful Employment Rule, unwitting students will use taxpayer-funded financial aid to enroll in for-profit programs that fail to prepare them for future jobs.
     
  • Increase burden on states to regulate for-profit colleges: Now that the U.S. Department of Education has decided to stop regulating for-profit colleges, students will look to states to make sure predatory institutions selling substandard programs are held accountable.
     
  • Increase debt load on students: Despite states’ increased enforcement efforts, more students will enroll in programs run by for-profit institutions that leave students without job opportunities and with inordinate financial debt loads that they can’t pay off.
     
  • Devaluing investments in state schools: Instead of enrolling in state schools established to make higher education available to everyone, students will enroll in worthless for-profit or vocational programs, causing taxpayers to lose the value of their investment in state systems of higher education.

The states’ lawsuit says Education Secretary DeVos’ “decision to repeal the GE Rule without promulgating any alternative standard for implementing the Higher Education Act’s Gainful Employment provision is arbitrary, capricious, and contrary to law … and must be set aside.”

A copy of the lawsuit is available at: https://oag.dc.gov/sites/default/files/2020-07/Gainful-Employment-Complaint.pdf

AG Racine is joining the lawsuit, which is being co-led with Pennsylvania, Maryland, Colorado, and New Jersey, along with Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, and Wisconsin.

Attachments