We are suing Betsy DeVos for helping predatory for-profits

Student Defense filed a landmark federal lawsuit Jan. 22, on behalf of the American Federation of Teachers, the California Federation of Teachers and individual members, calling out the Trump administration’s attempt to strip protections from students at for-profit and career college programs.

a graduation cap sits on top of a mousetrap

The suit targets the illegal repeal of the “gainful employment” rule, a measure that requires colleges to show that their students have found stable employment after graduation. The rule has been in place since 2015, working to ensure students could rely on their colleges to give them a valuable education that would lead to a steady job. But Secretary of Education Betsy DeVos repealed it in 2019.

American Federation of Teachers et al. v. DeVos accuses DeVos of violating federal law by pushing through a repeal riddled with errors and unfounded assertions. It argues the repeal puts students at the mercy of for-profit schools with a documented history of leaving borrowers with worthless degrees and crippling debt.

The lawsuit asks the court to immediately reinstate the gainful employment rule and restore vital protections for students considering enrolling in a career-certificate program or a for-profit college. By the Department of Education’s own estimates, the lawsuit also stands to save taxpayers $5.3 billion by ending the flow of federal funds to failing programs.

“Predatory for-profit colleges have been trying to escape accountability for years, and Secretary DeVos was only too happy to help them,” says Student Defense President Aaron Ament. “With this lawsuit we are going to strike down DeVos’ illegal repeal of the gainful employment rule and protect students from schools that leave borrowers with worthless degrees and debt they can never repay.”

“You can gauge a person’s soul by how they respond in a crisis. It’s telling that Betsy DeVos, when confronted with the biggest student debt disaster in American history, decides once again to side with profiteers, not borrowers,” says AFT President Randi Weingarten. “Rather than simply sticking with a rule that protects students, she writes a new one on behalf of her for-profit college friends—and can’t even get the details right. This error-ridden repeal would be comical if the stakes weren’t so high, but for borrowers confronting a lifetime of debt and worthless degrees, their lives are literally on the line.”

When it’s working, the gainful employment rule requires schools to meet a debt-to-earnings ratio; if that ratio is not met, students cannot use federal loan money to attend. The rule also requires that schools disclose important information such as the percentage of students who successfully graduate, how much debt their graduates accrue, and how much they earn. When gainful employment was instated, about 1,400 programs serving 840,000 students did not pass the accountability standards. Because DeVos halted enforcement of the rule upon taking office, no schools have been held accountable for their failures.

“College students rely on the protections of the gainful employment rule not only to protect themselves from for-profit scams, but as a guardrail so they can make informed decisions about their future careers,” says CFT President Jeff Freitas. “Betsy DeVos wants to tear those protections away because she would rather do the bidding of predatory colleges than help the students she’s sworn to serve.”

Student Defense also filed the lawsuit on behalf of Isai Baltezar, a fifth-grade teacher in Santa Cruz, Calif., and Julie Cho, a lecturer at the University of California at Irvine. Both Baltezar and Cho, like so many teachers across the country, are considering enrolling in additional postsecondary programs to further their careers. However, both have been unable to find the information they need about programs’ outcome measures, including completion rates and job placement rates, as well as information about how many graduates are successful in repaying their student loans. Baltezar and Cho are both members of the CFT and the AFT.

The complaint, filed in the United States District Court for the Northern District of California, is available here.

[AFT Media Relations]