Lawsuit Seeks Records Related to Repeal of Gainful Employment Rule That Protected Student Borrowers

(Photo: Gage Skidmore)

American Oversight and nonprofit legal organization Student Defense sued the Department of Education on Wednesday for records related to the July 2019 repeal of a rule protecting students from excessive debt. 

The gainful employment rule, which went into effect in 2015, sought to ensure that graduates of for-profit college or training programs earn enough income in proportion to their student loan debt. Today’s lawsuit seeks the release of records of communication between Department of Education officials, including Secretary Betsy DeVos, and any non-governmental entities about the repeal of the rule.

The gainful employment rule has been a subject of controversy since DeVos took office in 2017. Despite data that showed that more than 800 programs were in violation of the rule, DeVos neglected to enforce it, causing 18 state attorneys general to sue her in 2018 to compel action.

One institution with programs that failed the rule’s income test was DeVry University (now Adtalem Global Education), which in 2016 agreed to pay a $100 million settlement in a federal lawsuit for falsely advertising the success of graduates. Education Department calendars obtained by American Oversight through the Freedom of Information Act show the 2016 and 2017 lobbying efforts of DeVry’s CEO to roll back the gainful employment rule.

“It may not be a surprise when a Secretary of Education who staffs her agency with former for-profit college lobbyists and defenders releases a rule that blatantly and egregiously benefits corporate interests over students, but that doesn’t make it any less problematic,” said Austin Evers, executive director of American Oversight. “The public needs to see behind DeVos’s talking points to understand the scope of influence she has welcomed into the Department of Education.”

Student Defense filed a FOIA request in October 2018 seeking records of top Education officials’ communications with non-governmental parties about the rule. More than a year and a half later, the department has failed to release the requested records as required by law, and Wednesday’s lawsuit seeks to enforce the request. Separately, Student Defense is also representing the American Federation of Teachers and other plaintiffs in litigation to challenge the legality of the repeal. 

Student Defense has also filed FOIA requests with the Education Department and the Social Security Administration for more information on the repeal of the rule. More information on these requests, including responsive documents, is available here. This week’s suit is a part of American Oversight’s investigation into industry access at the Department of Education.

“The Gainful Employment rule was a common-sense approach to provide vital protections for students considering career-oriented and for-profit programs,” said Dan Zibel, chief counsel at Student Defense. “When Secretary DeVos repealed the rule, she did so in a manner that was riddled with errors and unfounded assertions. The Department has acknowledged that the repeal will leave students at a greater risk of choosing poor performing programs. The public has a right to know what influenced her decision.”

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