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Excerpt of APSCU vs US Lawsuit over For-Profit Universities

— November 7, 2014

US Department of EducationHere is an excerpt from the lawsuit filed by the Association of Private Sector Colleges and Universities (APSCU) against the US Department of Education and The United States at large.  As I wrote earlier today, this lobbying group is suing US federal government for enacting new regulations concerning for-profit universities.

To be clear, these institutions employ highly aggressive recruitment tactics, targeting our nation’s most poor and vulnerable.  Further, these for-profit schools cost more than state schools, private non-profits, and community colleges, and regularly produce students with little more job readiness than with only a GED certificate.


Plaintiff Association of Private Sector Colleges and Universities (“APSCU”), for its complaint against Defendants the Honorable ARNE DUNCAN, in his official capacity as Secretary of the Department of Education (the “Secretary”), THE DEPARTMENT OF EDUCATION (the “Department”), and THE UNITED STATES OF AMERICA allege, by and through their attorneys, as follows:


1.       This is an action under the United States Constitution and the Administrative Procedure Act, 5 U.S.C. §§ 551-706 (“APA”), challenging recently adopted regulations that exceed the Department’s statutory authority and depart from settled principles of agency rulemaking. The final so-called “gainful employment” rule, 79 Fed. Reg. 64,889 (Oct. 31, 2014), is unlawful, arbitrary, and irrational, and will needlessly harm millions of students who attend private sector colleges and universities.

2.       As set forth more fully below, APSCU is a voluntary association of private sector educational institutions whose membership includes approximately 1,400 accredited, private postsecondary schools, institutes, colleges, and universities. APSCU and its members fully support lawful, rational regulations governing financial aid, but the challenged regulations are neither lawful nor rational. Rather, they are unconstitutional; contrary to Title IV of the Higher Education Act of 1985, as amended, 20 U.S.C. §§ 1070-1099d (“HEA”); arbitrary and capricious; and otherwise in violation of the APA.

3.       The Department has already tried and failed to construct a regulatory regime on the basis of the same statutory phrase it invokes now —“prepare students for gainful employment in a recognized occupation”—in a set of rules it promulgated in 2010 and 2011 (collectively, the “2011 rule” or “2011 regulations”). 76 Fed. Reg. 34,386 (June 13, 2011); 75 Fed. Reg. 66,832 (Oct. 29, 2010). That fruitless attempt spanned several years; left policymakers, schools, and their students facing uncertainty; and needlessly imposed costs on taxpayers. The United States District Court for the District of Columbia struck down that previous attempt to regulate because a central feature of those regulations—the loan repayment rate test—lacked any reasoned basis. See APSCU v. Duncan, 870 F. Supp. 2d 133, 152-55 (D.D.C. 2012) (“APSCU I”). The Court also struck down the reporting aspects of the 2011 rule, because they violated 20 U.S.C. § 1015c. See id. at 155; see also APSCU v. Duncan, 930 F. Supp. 2d 210, 214-19 (D.D.C. 2013) (“APSCU II”) (denying Department’s motion to amend judgment to reinstate reporting requirements).

Again, as this current lawsuit over for-profit universities unfolds, we at Legal Reader will provide all the updates you need.

Editor’s note: As budgets continue to tighten, educators of all levels are finding themselves responsible for funding their own classrooms. This helpful guide may make that a bit easier.

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