Teachers’ Union Sues Secretary DeVos for Repealing Gainful Employment Rule

Education Secretary Betsy DeVos testifies during a Senate Committee discussing proposed budget estimates and justification for FY2020 for the Education Department in Washington on March 28, 2019. (Zach Gibson/Getty Images)

The Department of Education and Secretary Betsy DeVos were hit with a lawsuit on Wednesday from the National Student Legal Defense Network (Student Defense) over the repeal of an Obama administration regulation that they say protects students at for-profit schools and career college programs.

Student Defense filed the lawsuit on behalf of the American Federation of Teachers (AFT), in which they argue the repeal of the “gainful employment” rule “puts students at the mercy of for-profit schools with a documented history of leaving borrowers with worthless degrees and tens of thousands of dollars of debt they cannot repay.”

According to the Institute for College Access and Success (pdf), the 2015 rule “required any program where typical graduates’ debts exceed both 8 percent of their total income and 20 percent of discretionary income to improve or lose access to federal financial aid.”

Those in favor of the rule say it protects borrowers from unaffordable loans.

The Department of Education repealed the law in 2019, after previously pausing regulations that imposed requirements on for-profit higher education institutions.

In a 2019 press release DeVos wrote, “the Department has determined that the GE regulations rely on a debt-to-earnings (D/E) rates formula that is fundamentally flawed and inconsistent with the requirements of currently available student loan repayment programs.”

Student Defense filed the legal action against the education department in the U.S. District Court for the Northern District of California. AFT and Student Defense are calling for a reverse of DeVos’s decision and reinstatement of the regulations for for-profit colleges.

Randi Weingarten, the President of AFT, criticized DeVos for siding “with profiteers, not borrowers.”

“Rather than simply sticking with a rule that protects students, she writes a new one on behalf of her for-profit college friends—and can’t even get the details right,“ she said in a Wednesday statement. ”This error-ridden repeal would be comical if the stakes weren’t so high, but for borrowers confronting a lifetime of debt and worthless degrees, their lives are literally on the line.”

In a June 2017 statement prior to the repeal, DeVos said “Since their creation under the previous administration, Gainful Employment regulations have been repeatedly challenged by educational institutions and overturned by the courts, underscoring the need for a regulatory reset.”

“The current rules would unfairly and arbitrarily limit students’ ability to pursue certain types of higher education and career training programs. We need to expand, not limit, paths to higher education for students, while also continuing to hold accountable those institutions that do not serve students well.”

The lawsuit alleges that the department did not follow the law in repealing the Obama-era rule by misinterpreting “the evidence that supported the gainful employment rule.”

Department of Education press secretary Angela Morabito said in a statement to The Epoch Times that “the Department will vigorously defend its final regulation rescinding this deeply flawed rule.”