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California Association of Private Postsecondary Schools

U.S. Won’t Appeal Decision on Controversial Gainful-Employment Rule

05/22/2013

THE CHRONICLE OF HIGHER EDUCATION.  MAY 22, 2013.  The Association of Private Sector Colleges and Universities said on Wednesday it had received word that the U.S. Department of Education has elected not to appeal a federal judge’s decision last year that blocked key parts of the agency’s controversial “gainful employment” rule before the regulation took effect.

Instead of continuing with litigation over the rule, the department this week convened the first of four hearings that it will hold in advance of a second round of rule making focused on fraud in the student-aid system, which is expected to begin in the fall. The rule-making process will revisit the gainful-employment issue.

The original rule would have cut off federal student aid to career-oriented higher-education programs whose graduates had high debt-to-income ratios and low loan-repayment rates, but a judge blocked key parts of the rule after the association, which represents for-profit colleges, challenged it in court.

“With the Congress expected to undertake Higher Education [Act] reauthorization in the coming months, we hope Congress will help all institutions of higher education, and the department, determine where and how we create appropriate protocols to determine outcomes for all students at all institutions,” said Steve Gunderson, Apscu’s president, in a written statement. The department did not immediately confirm that it decided not to appeal the decision.