States sue Betsy DeVos over delays to Obama-era crackdown on for-profit colleges

A coalition of 18 attorneys general is suing Secretary of Education Betsy DeVos and her Department, accusing the agency of illegally delaying Obama-era rules aimed at cracking down on for-profit colleges.

The complaint, filed in federal court, centers around the Department of Education’s decision to delay certain aspects of the gainful employment rule. The regulation, developed under the Obama administration, requires that career-training programs prove they’re actually preparing students for jobs.

The lawsuit is the latest development in years of controversy over the rule, which supporters say is necessary to prevent students from wasting taxpayer dollars and their own time and money on programs with little value in the labor market. Detractors say the rule unfairly targets the for-profit college sector.

Obama-era Department of Education officials began developing the regulation in 2009 and it faced multiple court challenges in the following years.

Ultimately, after going through a process known as negotiated rule making — where stakeholders meet and offer input on a regulation — gainful employment ultimately became law and was supposed to take effect in July 2017. But under DeVos, the Department of Education has delayed multiple aspects of the rule and said schools could use broader metrics to challenge whether they’re in compliance with the law. The agency has also said it will convene a new negotiated rule-making to revise the rule.

The coalition of state attorneys general argue in the suit that the Department is illegally delaying the implementation of a rule that’s already on the books. They also say the delays could be hurting students by allowing programs that charge high tuition and offer poor outcomes to continue to operate.

In a statement, Liz Hill, a Department spokeswoman, accused the Democratic AGs of “seeking to score quick political points” with the suit. “While this Administration, and Secretary DeVos in particular, continue work to replace this broken rule with one that actually protects students, these legal stunts do nothing more than divert time and resources away from that effort,” the statement reads.

In the past, officials have justified delays to the gainful employment regulation by citing a court ruling in a case filed by a cosmetology association challenging the rule, which said the Department needed to give the member schools more time to appeal the debt-to-earnings ratios calculated by the agency.

The regulation requires career training programs to prove graduates’ loan payments don’t exceed 20% of their discretionary income or 8% of their total earnings. Programs that failed to meet these metrics for multiple years could lose access to federal financial aid. The Obama administration found earlier this year that more than 800 programs were failing to meet the rule’s requirements.

The suit filed Tuesday is the second time a coalition of attorneys general has accused DeVos and her agency of illegally delaying an Obama-era rule. Nineteen AGs sued earlier this year over delays to implementing the borrower defense regulation, which allows students who believe they’ve been victims of fraud to have their student loans wiped away.