Friday, November 07, 2014
By Rose Bouboushian
(CN) - A new regulation that requires for-profit colleges to prepare
students for "gainful employment" will "needlessly harm millions," a
trade group alleges in Federal Court.
The Association of Private
Sector Colleges and Universities, a voluntary association of about
1,400 accredited, private postsecondary schools, filed suit Thursday in
Washington, D.C., against the U.S. Department of Education, challenging
the newly adopted, so-called "gainful employment" rule.
schools that belong to the APSCU "support lawful, rational regulations
governing financial aid, but the challenged regulations are neither
lawful nor rational," the complaint states. "Rather, they are
unconstitutional; contrary to Title IV of the Higher Education Act of
1985, as amended; arbitrary and capricious; and otherwise in violation
of the" Administrative Procedure Act.
Adopted on Oct. 31, the
regulations "exceed the [Education] Department's statutory authority and
depart from settled principles of agency rulemaking," the association
"The department has already tried and failed to
construct a regulatory regime on the basis of the same statutory phrase
it invokes now - 'prepare students for gainful employment in a
recognized occupation' - in a set of rules it promulgated in 2010 and
2011," the complaint states. "That fruitless attempt spanned several
years; left policymakers, schools, and their students facing
uncertainty; and needlessly imposed costs on taxpayers."
But a federal judge in Washington struck
that attempt down in 2012 "because a central feature of those
regulations - the loan repayment rate test - lacked any reasoned basis,"
the association claims.
"Instead of correcting the flaws that
rendered its 2011 rule invalid, the department's new rule only repeats
and exacerbates them," the complaint continues. "The department has
since conceded that there was no reasoned basis for its loan repayment
rate test, admitting that it 'has found no expert studies or industry
practice,' nor any other alternative support."
association says that, "for close to 50 years, Congress has required by
statute that certain postsecondary educational programs must 'prepare
students for gainful employment' in a recognized occupation or
profession to be eligible to participate in Title IV financial aid
"But until the 2011 rulemaking, that phrase was never
understood to mean that a program could only remain eligible for Title
IV funding if its recent graduates who received Title IV aid have
attained a particular level of earnings relative to the amount of debt
that they incurred to attend the program," the complaint continues.
authority for "its far-reaching regulatory test," the APSCU "mistakenly
relies" on a law that essentially says programs need only prepare
students for "a job that pays," the association claims.
the regulations impose massive disincentives on private sector schools
that currently seek to educate low-income, minority, and other
traditionally underserved student populations, because, as an historical
matter, those demographics are widely recognized as most at risk of
failing the department's arbitrary test," the complaint states. "Thus,
instead of increasing the availability of higher education, the
department's regulations will limit educational opportunities for
traditionally underserved groups - leaving those students with
diminished access to higher education and potentially causing them to
forgo postsecondary education altogether."
insists that "No single, one-size-fits-all statistical test can
accurately measure whether all programs in all fields prepare students
for gainful employment."
It wants the court to declare the regulation unlawful and set it aside.
Douglas Cox and Timothy Hatch with Gibson, Dunn & Crutcher represent the group.
regulation is "so unacceptable and in violation of federal law, that we
were left with no choice but to file suit," Steve Gunderson, the
group's president and CEO, said in a statement. "If successful, our suit
will protect student access and opportunity to higher education at a
time when the U.S. Department of Education seems interested in limiting
choices for students by closing private sector programs."