A judge has thrown out a group of for-profit colleges’ challenge to the U.S. Department of Education’s gainful-employment rule, Reuters reports. The lawsuit was one of two filed last year in response to the department’s final rule, which seeks to judge career-oriented programs on their graduates’ ability to repay their student loans.
The lawsuit was brought by the Association of Proprietary Colleges, which represents 20 institutions in New York. In a written statement, the group’s executive director, Donna Stelling-Gurnett, said, “While we agreed with the department’s goals for this rule from the outset, we remain steadfast in our conviction that this regulation does not achieve those goals.”
In his decision, Judge Lewis A. Kaplan of the U.S. District Court in New York City wrote that the association’s claim that the department had overstepped its bounds in issuing the rule “is quite surprising, but not for its merit. It is surprising because it is at best ill conceived and at worst misleading.”
The other lawsuit in opposition to the rule, filed by the Association of Private Sector Colleges and Universities, is still pending. In a statement, that group’s general counsel, Sally Stroup, said the association was reviewing the decision but added that the New York college group’s lawsuit was “very different from the case brought by APSCU.”
The gainful-employment rule has been controversial since its introduction, in 2011. Ms. Stroup’s group successfully sued to have a major portion of the rule thrown out, in 2012. The final rule, released in October, is expected to cause 1,400 programs, 99 percent of them at for-profit colleges, to be put at risk of losing federal student aid.
