Attorney General Shapiro Sues U.S. Education Secretary DeVos for Refusing to Enforce Laws Designed to Protect Students from Abuse by Predatory For-profit Schools

October 17, 2017 | Topic: Consumers

HARRISBURG — Attorney General Josh Shapiro led a coalition of 17 other state Attorneys General today and sued the U.S. Department of Education and Secretary Betsy DeVos for refusing to enforce the Gainful Employment Rule, designed to protect students from predatory practices at for-profit schools. The rule helps students make informed choices by requiring schools to provide information about average student debt, graduation rates, employment prospects and average earnings of graduates.

The coalition of Attorneys General is led by Pennsylvania Attorney General Shapiro and Maryland Attorney General Brian E. Frosh.

“This rule is a critical protection for students in Pennsylvania and throughout the country,” Attorney General Shapiro said. “Students need to know a school’s track record in helping them find jobs after graduation, and how much loan debt they’ll carry once they graduate. Since the Department of Education won’t protect our students and families from deceptive practices by these schools, I will.”

The complaint, filed in U.S. District Court for the District of Columbia, alleges the Department of Education violated federal law by refusing to enforce the Gainful Employment Rule, which implements the requirement in the Higher Education Act that all for-profit schools, all vocational schools, and non-degree programs at all other schools “prepare students for gainful employment in a recognized occupation.”

The Gainful Employment Rule has two key aspects:

The law helps prospective students make informed choices by requiring schools to provide information about the program’s average debt load, the loan repayment rate of all students who enroll in the program, the percentage of students who graduate, the number of graduates who obtain employment in a field related to the program, and average earnings of graduates.

The law also assesses whether schools’ programs provide education and training to their students that lead to earnings that will allow students to pay back their student loan debts. If the programs fail the objective metrics, federal student loans and grants would no longer be provided to those programs.

On July 5th and August 18th, the Department of Education announced its intention to delay large portions of the Gainful Employment Rule without soliciting, receiving, or responding to any comment from stakeholders or members of the public. This violates the Administrative Procedure Act.

Attorney General Shapiro and his colleague attorneys general argue in their lawsuit that the delays have no legal justification and the Department’s actions are “arbitrary and capricious and an abuse of discretion.”

In Pennsylvania, the average student loan debt for college graduates in 2016 was $35,759 – the second highest of any state. Pennsylvanians collectively owed $61.8 billion in private and federal student loans as of December 2016.

“Pennsylvania is ground zero when it comes to student loan debt,” Attorney General Shapiro said. “It’s important that students in our Commonwealth have the information they need to make informed choices about schools they plan to attend. If students aren’t gainfully employed following higher education, it becomes nearly impossible for them to pay back loan debt for a degree that was supposed to lead to a higher paying job.”

Today’s complaint  asks the court to declare the Department’s delay notices unlawful and to order the Department to implement the Gainful Employment Rule without delay.

In addition to Pennsylvania and Maryland, the attorneys general of California, Connecticut, the District of Columbia, Delaware, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia and Washington joined today’s lawsuit.

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