ADEA State Update

The Legal Roundup - November 2017

(Federal Court, Gainful Employment) Permanent link   All Posts

ScalesAndBookSeventeen states and the District of Columbia have sued the U.S. Department of Education, challenging the department’s lack of implementation of the gainful employment rule. The Obama-era gainful employment rule allows the federal government to terminate federal funding to institutions of higher education where graduates end up with higher student loan debt than earnings and provides a pathway for those same graduates to use the federal government’s income-driven repayment plan.

More specifically, in order to be eligible for federal funding under the Higher Education Act Title IV student assistance programs, an educational program must lead to a degree at a nonprofit or public institution or it must prepare students for “gainful employment in a recognized occupation.” Therefore, with very few exceptions, any nondegree program offered by nonprofit or public institutions and all educational programs offered at for-profit institutions must lead to gainful employment.

The complaint filed in the U.S. District Court for the District of Columbia by the 18 attorneys general asks the court to declare as unlawful the notices the department issued earlier in the year that delay enforcement of key provisions of the gainful employment rule. The complaint also asks the court to order the department to enforce the gainful employment rule in its entirety, arguing that the delay notices operate as an amendment to or a recision of the rule. 

Additionally, the department has released the 2017–18 schedule for its Negotiated Rulemaking Committee Meetings on gainful employment.[1] These meetings are open to the public. The first committee meeting is slated for Dec. 4–7, in Washington, D.C.  

ADEA Advocacy and Government Relations staff will continue to keep ADEA members abreast of any further litigation or regulatory efforts impacting the gainful employment rule.

[1] Typically, the Department of Education develops its proposed regulations without public input and then publishes them in the Federal Register for comment by the public. The published document is known as a Notice of Proposed Rulemaking (NPRM). Under negotiated rulemaking, the Department of Education works to develop an NPRM in collaboration with representatives of the parties who will be affected significantly by the regulations. This is done through a series of meetings during which these representatives, referred to as negotiators, work with the department to come to consensus on the department’s proposed regulations. These meetings are facilitated by a neutral third party.

The Department of Education is specifically required by law to use negotiated rulemaking to develop NPRMs for programs authorized under Title IV of the Higher Education Act of 1965, as amended (Title IV programs), unless the Secretary determines that doing so is impracticable, unnecessary or contrary to the public interest. The department generally follows these same procedures when it uses negotiated rulemaking to develop NPRMs for programs other than the Title IV programs.

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