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Betsy DeVos scraps Obama-era rule on for-profit colleges

CNN logo CNN 6/28/2019 By Katie Lobosco, CNN
Betsy DeVos wearing glasses: WASHINGTON, DC - AUGUST 16 : Secretary of Education Betsy DeVos listens as President Donald J. Trump speaks during a Cabinet meeting in the Cabinet Room of the White House on Thursday, Aug 16, 2018 in Washington, DC. © Jabin Botsford/The Washington Post/Getty Images WASHINGTON, DC - AUGUST 16 : Secretary of Education Betsy DeVos listens as President Donald J. Trump speaks during a Cabinet meeting in the Cabinet Room of the White House on Thursday, Aug 16, 2018 in Washington, DC.

Education Secretary Betsy DeVos is rescinding an Obama-era rule that was created to protect students from abusive for-profit colleges.

The rule, known as Gainful Employment, required for-profit colleges and career certificate programs to post debt-to-earnings ratios, proving that their students could find good-paying jobs upon graduating. If the average ratio did not meet government standards, the school's federal funding would be revoked.

The Department of Education outlined a number of reasons the regulation was flawed in a notice posted Friday. It said the rule failed to account for factors other than program quality that could affect a graduate's earnings.

DeVos has also criticized the rule for not requiring all nonprofit colleges to also publish the data. In May, the department released new student loan data at the program level from nonprofit colleges, as well as certificate-granting programs.

Consumer advocates slammed DeVos on Friday for rolling back the student safeguard.

"Again and again, Secretary DeVos proves she only cares about protecting for-profit colleges, no matter how many students they swindle," said Aaron Ament, president of the National Student Legal Defense Network.

DeVos has been widely criticized by Democrats for hiring department officials with ties to the for-profit industry.

The secretary attempted to roll back another Obama-era rule on for-profit colleges, which allows students defrauded by their schools to seek loan forgiveness. But a federal judge -- siding with Democratic attorneys general from 18 states and the District of Columbia -- ruled that DeVos' freeze was "arbitrary and capricious" and ordered immediate implementation of the rule in October.

Still, claims for loan forgiveness had added up while the Department of Education fought the lawsuit in court. More than 150,000 people are waiting to hear if their debt will be canceled, and DeVos was sued again over the delay earlier this week.

The Department of Education froze the Gainful Employment rule about two years ago, and it has since been under review. It was never in effect long enough to result in any cuts to funding, but schools had published the data in 2017, before DeVos was sworn in. At that time, about 800 programs serving hundreds of thousands of students failed the accountability standards.

Together, the two rules were an important part of the Obama administration's crackdown on for-profit colleges like Corinthian and ITT Tech, which were accused of defrauding students and eventually shut down.

The Education Department did not immediately respond to a request for comment.

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