For-profit college group sues to block federal rules
Saturday, January 22, 2011
A group representing for-profit colleges sued the Education Department on Friday to try to block new federal rules relating to how the schools pay recruiters, how they represent themselves to prospective students and how states oversee their activities.
The Association of Private Sector Colleges and Universities alleges in the lawsuit, filed in the U.S. District Court for the District of Columbia, that the regulations published in late October are unconstitutional and violate federal administrative law.
The association represents 1,500 for-profit schools, including those operated by The Washington Post Co.'s Kaplan unit and several other publicly traded companies.
At issue in the suit are three regulations scheduled to take effect July 1.
One specifies minimum steps a state must take to authorize postsecondary programs that participate in federal student aid programs. Another strengthens federal authority to take action against schools that engage in deceptive marketing. A third reinforces a federal law that prohibits schools from paying recruiters based solely on how many students enroll.
Administration officials describe the proposed rules as responses to reports of abuses in the for-profit sector of higher education. "We're confident that the published regulations will do the best job of protecting students and taxpayers," said Justin Hamilton, a spokesman for the Education Department.
Harris Miller, the association's president, called the rules "vague and poorly written" and said "They will have a chilling effect on job creation and innovation."
The suit does not address the department's proposal to require for-profit schools to take steps to contain student debt and increase loan repayment rates. The proposed "gainful employment" rules, which the industry has fiercely opposed, are still pending. The Obama administration has said it aims to publish a final version of those rules early this year.