DeVos revokes Obama-era rule policy of policing for-profit colleges

Collin Binkley
Associated Press

The Trump administration on Friday revoked an Obama-era rule that aimed to terminate federal funding to for-profit college programs that consistently left graduates with high student debt.

In this Dec. 18, 2018, file photo, President Donald Trump listens as Secretary of Education Betsy DeVos speaks during a roundtable discussion on the Federal Commission on School Safety report, in the Roosevelt Room of the White House in Washington.

Education Department officials announced that the 2014 gainful employment rule will be rescinded effective July 1, 2020. The agency’s announcement said the rule focused too narrowly on graduate earnings and unfairly targeted for-profit colleges.

“The department’s rules should be designed to support all students and treat all schools fairly. The previous administration’s rule did neither,” Education Secretary Betsy DeVos said in a statement. “All schools should be clear and transparent about their outcomes and all students should have a full range of information available. We’re committed to making that happen.”

Instead of punishing schools that leave students strapped with debt, DeVos has promised to publish earnings data for all college programs as part of an update of the department’s College Scorecard website. DeVos has said it’s a fairer alternative that lets students decide for themselves whether a school meets their standards.

Under the rule, certain vocational programs could be cut off from funding if the average debt ratio of their graduates stayed above a certain limit for two out of three straight years. It was created under President Barack Obama amid widespread complaints of fraud against for-profit chains including Corinthian Colleges and ITT Technical Institute. Both chains collapsed under pressure from Obama officials.

But before any schools lost funding, DeVos moved to delay the rule in 2017 and a year later began the process to revoke it. A federal judge ruled last September that the delay was illegal, but the department never took steps to enforce the rule, citing a dispute with the Social Security Administration that has left the department unable to access earnings data.

Friday’s announcement drew quick condemnation from Democrats and borrower advocates, which had lobbied the department to revise the rule rather than remove it entirely.

Sen. Patty Murray, D-Wash., the top Democrat on the Senate’s Health, Education, Labor, and Pensions Committee, said the repeal is “a gift to predatory programs and for-profit colleges that want to take unsuspecting students for a ride.”

The chief of the National Student Legal Defense Network, Aaron Ament, said the decision proves that DeVos “only cares about protecting for-profit colleges, no matter how many students they swindle.”

But the move was welcomed by the Career Education Colleges and Universities, a lobbying group that represents dozens of for-profit colleges across the U.S.

“This standard is universally fair and applies to all students, in all programs, at all schools, regardless of sector – something that previous administrations did not do,” said Steve Gunderson, president of the group.

The rollback is only the latest in the Trump administration’s campaign to remove Obama-era regulations.