Court rejects for-profit colleges’ challenge to Department of Education “gainful employment” rule

As the AP reports (via Huffington Post):

A federal court has ruled in favor of tough new regulations aimed at career training programs, dealing a major blow to the for-profit college industry.

In an opinion released Tuesday, the U.S. District Court for the District of Columbia ruled the Education Department has the right to demand that schools show their graduates make enough money to repay their student loans. The Education Department announced its plan last fall as a way of weeding out fraudulent colleges that were targeting low-income students because of their ability to receive federal student loans, grants and military benefits.

Under the new rules, which go into effect July 1, a program has to show that the estimated annual loan payment of a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of total earnings. The administration said about 99 percent of the training programs that will be affected come from the for-profit sector, although affected career training programs can come from certificate programs elsewhere in higher education.

The court's opinion is here. Soccer fans will enjoy footnote 4, which offers an extended soccer analogy.

On behalf of 28 interested organizations, Public Citizen filed an amicus brief in the case, which is available here.

Leave a Reply

Your email address will not be published. Required fields are marked *