A trade group of 1,400 for-profit colleges and universities sued in federal court to force the U.S. Department of Education to rescind regulations designed to prevent the schools from taking billions in federal aid if they also stick students worthless degrees.

The Daily Caller Education Editor Eric Owens files this report:

Mainly at issue in the lawsuit is a regulation called the “gainful employment rule,” reports National Public Radio.

The gainful employment rule is, like so much federal regulation, complex. Basically, though, the rule compares earnings to debt payments for graduates of for-profit schools as well as certificate programs at traditional nonprofit and public schools. Schools run afoul of the regulations if graduates can’t get jobs which pay enough so that loan payments don’t exceed 8 percent of their total annual earnings or 20 percent of their discretionary income.

Schools which fail to meet these income-to-loan levels risk losing access to taxpayer-subsidized student loans and taxpayer-funded grants.

The 77-page lawsuit makes many claims. “The new gainful employment rule imposes arbitrary new metrics on private sector schools,” it argues. Also, the “arbitrary and capricious” debt-to-income measurement depends on factors schools can’t control such as “students’ choices of what jobs to pursue, the state of the economy and the job market in the relevant industry, and students’ individual financial circumstances.”

Additionally, the lawsuit observes, “private sector schools consume far fewer taxpayer dollars than their public and non-profit counterparts.”


 
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