SACRAMENTO – California Attorney General Xavier Becerra today filed a lawsuit against the U.S. Department of Education for unlawfully delaying critical provisions of the Gainful Employment Rule, an Obama-era protection that requires for-profit schools to prepare students for “gainful employment in a recognized occupation.” These provisions were set to take effect on July 1, 2017, but Education Secretary Betsy DeVos announced on June 15th that the Department would refuse to implement them as part of a “regulatory reset.” This refusal violates the Administrative Procedure Act because it is an arbitrary and capricious action to thwart a duly enacted rule.
“Less than a year ago, Donald Trump had to pay $25 million to settle lawsuits against his now-defunct, for-profit Trump University. Now, as President, his Department of Education seems dead-set on continuing a tarnished legacy of putting predatory for-profit colleges ahead of students,” said Attorney General Becerra. “Regardless of his fond nostalgia for those business practices, enough is enough. At the California Department of Justice, we will continue working to ensure that all who seek higher education can do so without being saddled unfairly with debt and a sham education. This Administration is legally required to implement the Gainful Employment Rule, and we will fight in court to make sure it does.”
Specifically, the Gainful Employment Rule requires that educational programs at for-profit colleges produce graduates who earn enough to pay back the debt incurred from attending the program. Programs that do not meet minimum debt-to-earnings thresholds for a sustained period will lose federal student-aid eligibility. The Rule also requires that key transparency disclosures be provided to students, such as typical graduate earnings, median debt of borrowers, and percentage of students graduating on time.
Since taking office, Attorney General Becerra has been committed to protecting students. In June, he led a coalition of 19 attorneys general in suing the Department of Education for unlawfully delaying the implementation of the Borrower Defense Regulations, which are aimed at protecting students from deceptive loan servicing practices and fraud. He has also announced a settlement with Aequitas Capital Management that provides more than $51 million in debt relief for Californians who attended Corinthian Colleges, a for-profit school that defrauded its students, and urged Secretary DeVos to expedite loan forgiveness for Corinthian students.
Joining Attorney General Becerra in filing today’s lawsuit were the attorneys general of Connecticut, Delaware, Hawai’i, Illinois, Iowa, Massachusetts, Maryland, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.
A copy of the complaint is attached to the electronic version of this release at oag.ca.gov/news.