HUFFINGTON POST: In Court, For-Profit Colleges Demand End to Gainful Employment Rule

Career College Central Summary:

  • The big for-profit colleges were back in court in Washington again this morning, arguing to a federal judge that the Obama Administration did not have the power to subject them to even the most minimal standards of accountability for leaving their students with overwhelming debt.
  • Despite the mountain of evidence that many for-profit colleges have engaged in predatory behavior by deceiving, under-educating and overcharging students, despite the scores of lawsuits and investigations underway by federal and state law enforcement, these for-profit colleges are demanding permanent entitlement to billions annually from taxpayers without having to meet any real measures of success at all.
  • The issue presented in the case, brought by the for-profit college's lobbying group, APSCU, is whether the Administration was within the law when it issued its "gainful employment" rule, which would cut off federal student aid to career education programs that consistently leave graduates earning too little to pay down their loans.
  • APSCU managed to get the first version of the rule overturned by a different judge in 2012, on the ground that the Department of Education failed to provide a good reason for one component of the rule.  So the Department held another round of rulemaking sessions, and dropped the offending component. The resulting new rule is pretty weak, potentially affecting only some very poor quality, high priced programs, and leaving other bad programs untouched. But it still could do some good. That's why APSCU is determined to kill it, and that's what today's hearing was all about.
  • Before U.S. District Judge John Bates entered, APSCU's CEO, former congressman Steve Gunderson, strode in, and someone asked him, "Is Sally coming?" He wasn't sure. "Sally" was likely Sally Stroup, who was Assistant Secretary of Education under President Bush, responsible, among other things, for overseeing aid to for-profit colleges. Oversight, to say the least, was not strong in those years, as schools like Corinthian and ITT began raking in billions, developing systematic means to mislead students and cash their federal checks. Sally's job now? She's Executive Vice President of Government Relations and General Counsel — at APSCU.
  • During argument by his lawyer, Gunderson sat, eyes half-closed, listening reverently. A lawyer from APSCU's law firm, the litigation powerhouse Gibson Dunn, was by his side.
  • Douglas Cox, a Gibson Dunn partner who boasts on the firm website that he "played a principal role in the firm's successful representation of the prevailing candidate before the Supreme Court of the United States in Bush v. Palm Beach County Canvassing Board and Bush v. Gore," argued for APSCU.
  • In attacking the gainful employment rule, Cox discussed how a formulation in the rule came from a research paper by "two gentlemen named Baum and Schwartz." This might have surprised one of the paper's authors, Sandy Baum, who is a woman.
  • And that was after Cox insisted that the case turned on the word "prepare."

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