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California Sues Department of Education over Gainful Employment Rule Repeal

  • California AG Xavier Becerra sued the U.S. Department of Education (“ED”) over its repeal of the Gainful Employment Rule, which requires certain vocational school, community college, and for-profit college programs to meet federal standards that show that their graduates can earn enough to pay back the debt incurred from attending the program in order to be able to offer federal student aid, alleging that the rollback violates the Administrative Procedure Act (“APA”).
  • According to the complaint, ED statistics show that more than 98% of schools not meeting Gainful Employment Standards are for-profit colleges that use predatory marketing to target students. The complaint argues that granting these for-profit schools access to federal student aid would result in many more students choosing these programs, leading to higher student loan defaults, leaving California to expend millions of dollars to support defaulting students. The complaint also alleges that rolling back the Rule violates the APA because it is arbitrary, capricious, or otherwise not in accordance with the law.
  • The complaint seeks declaratory and injunctive relief.