Skip to main content

Search form

18 Attorneys General Step Up for Consumers After No Action from DeVos

Wednesday, October 18, 2017
Ellen Harnick

A lawsuit filed yesterday by 17 states and the District of Columbia accuses Education Secretary Betsy DeVos of illegally delaying enforcement of a rule designed to eliminate federal education funding from low-performing career college programs. The rule known as gainful employment was adopted by the previous administration in response to widespread concerns over the quality of instruction at these institutions.

In recent years, a series of lawsuits brought by states and federal agencies challenged whether taxpayer-funded educational assistance was reaped a fair return. The rule known as Gainful Employment was developed following years of complaints and investigations into the value for-profit college education. The vast majority of programs failing the gainful employment rule were at for-profit colleges. Many of these institutions receive as much as 90 percent of their annual revenues from taxpayers. If veterans’ financial aid is added to that of Title IV, taxpayer dollars can subsidize an even greater share of annual operating revenues at for-profits.

In response to this development, Ellen Harnick, the Western Office Director for the Center for Responsible Lending issued the following statement:

This lawsuit should not come as a surprise to Secretary DeVos or her Department. The attorneys general brought detailed concerns directly to Ms. DeVos in a February 22 letter. (PDF) Now months later, perhaps this legal action will finally attract the attention and substantive response that it deserves.

Research shows that many for-profit colleges disproportionately target and enroll African-American and Latino students. Hence, the likelihood is high that these students will also bear the burden of these educational failures. These failures further exacerbate the nation’s racial wealth gap.

The federal Gainful Employment rule is an important step in preventing some of these harms, and must be upheld, rather than rolled back by the Department of Education. Where the Department would not defend its own rule, it is critically important for consumers that the states attorneys general did.

Their actions are another powerful demonstration of the role that every state can have in ensuring students are protected from harmful practices. At the same time, additional state-level consumer protections can and must be enacted to provide another layer of consumer protection against predatory for-profit higher education institutions.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Charlene Crowell at charlene.crowell@responsiblelending.org