AG James Sues to Stop Trump Administration’s Illegal Elimination of Safeguards for College Students

NEW YORK – New York Attorney General Letitia James, as part of a coalition of 19 attorneys general from around the nation, today filed a lawsuit to stop the U.S. Department of Education and Education Secretary Betsy DeVos from repealing the “Gainful Employment” rule. The Gainful Employment rule provides critical protections for students considering enrolling in for-profit colleges and vocational schools and helps ensure these for-profit colleges and vocational schools “prepare students for gainful employment in a recognized occupation” following graduation.

“Betsy DeVos’s unjustified and illegal repeal of the Gainful Employment rule is yet another example of the Trump Administration’s continued efforts to dismantle critical safeguards protecting students and taxpayers in order to further the interests of for-profit colleges,” said Attorney General James. “We are standing up for students and calling out the Department of Education’s improper repeal of a rule that plays a vital role in ensuring students can make informed decisions about their education. The Trump Administration’s actions here are just another example of putting special interests ahead of student interests.”  

Investigations by Attorney General James and other state attorneys general have revealed that, for years, many for-profit colleges have engaged in fraudulent and abusive practices — including deceptive marketing — to convince students to enroll in useless academic and training programs. Those practices have left students across the country with piles of debt and no jobs to pay off that debt. That’s why, in 2014, the Department of Education sought to protect students at for-profit colleges by enacting the Gainful Employment rule, which held for-profit institutions accountable for the future success of their students. The rule specifically required schools to warn students if certain programs could not meet minimum standards and would have made failing programs ineligible to enroll students using federal financial aid.   

In a new rule set to take effect next week, the Department of Education will repeal the Gainful Employment rule and all the protections within it, specifically eliminating critical safeguards that protect students and taxpayers from investing in low-quality programs. 

Today’s lawsuit seeks to stop Education Secretary DeVos and the Department of Education’s new rule from taking effect, arguing that — without providing an alternative standard to the Gainful Employment rule — the new rule is arbitrary, capricious, and contrary to current law.

Previously, the Office of the Attorney General (OAG) filed suit against the Department of Education to challenge its unlawful delay of the Gainful Employment rule. Separately, the OAG has been active in protecting students from predatory for-profit schools for years and has recovered millions of dollars in restitution for students enrolled at for-profit colleges, including students of Career Education Corporation, DeVry University, and Education Management Corporation, as well as certain students who attended Corinthian College. The OAG also successfully challenged the Department of Education’s delay in implementing the Borrower Defense to Repayment rule, which provided relief to student loan borrowers defrauded by predatory for-profit colleges. Additionally, Attorney General James was able to obtain an agreement to provide more than $2.5 million in debt relief to nearly 300 former ITT Tech students in New York after an investigation found that ITT Tech and Student CU Connect CUSO preyed on students by deceiving them into taking out student loans.

Joining Attorney General James in filing today’s lawsuit are the attorneys general of Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Wisconsin, and the District of Columbia.