Court of Appeals Rejects Challenge to Gainful Employment Rule
- That the Department’s interpretation of the Higher Education Act was an unreasonable interpretation of the text of the statute;
- That the Department’s debt-to-earnings metrics established by the regulations were arbitrary and capricious; and
- That the requirement that institutions report certain information to the Department exceeds the Department’s statutory authority and is not severable from the rest of the regulation, thereby requiring that the entire rule be vacated.
The Court of Appeals, in a brief, unpublished decision, agreed with the federal district court that the Department’s interpretation of the gainful employment provisions warrants deference because “the phrase ‘gainful employment’ does not unambiguously mean what [APSCU] says it means.” The appeals court concluded that the debt-to-earnings metrics established by the Department were consistent with congressional intent because “[i]t would be strange for Congress to loan out money to train students for jobs that were insufficiently remunerative to permit students to repay their loans.” The court also concluded that neither the 2014 regulations nor the Department’s rulemaking process was arbitrary or capricious: the court found that the Department had addressed the concerns raised by APSCU in conducting further analysis after the invalidation of an earlier set of gainful employment rules, described below. Finally, the court rejected APSCU’s challenge to the reporting requirement by noting that it is limited to information about students who receive Title IV funds and falls within a statutory provision that permits the Department to collect information in certain types of federal education databases.
The March 8 decision was the latest in a series of court battles related to the Department’s attempt to define gainful employment. After the Department issued its first gainful employment rules in 2011, APSCU filed a lawsuit that in 2012 led a federal court to strike down key parts of the 2011 regulations and caused the Department to propose the current framework. A separate challenge to the 2014 rule brought by the Association of Proprietary Colleges was dismissed by a federal judge in New York in May 2015.
Institutions that offer gainful employment programs should confirm that they are complying with all aspects of the gainful employment rules that took effect July 1, 2015. More information about the regulations can be found on the Department’s Gainful Employment Information website.
The U.S. Department of Education and Department of Justice (“Departments”) recently weighed in on the obligations of school districts, colleges, and universities to provide...27 July 2016
China's National People’s Congress passed the Foreign NGO Law today, which will become effective from January 1, 2017. According to the news report on the latest draft, the...28 April 2016