Students Want Court to Dump DeVos Rule Protecting Scam Colleges. Biden Team Opposes.
The Biden Administration is urging a federal judge to keep in effect, for now, a rule, issued by Trump education secretary Betsy DeVos, that weakened the power of the U.S. Department of Education to curb abuses by for-profit colleges. The 2019 DeVos rule was basically a one-line cancellation of a 2014 Obama administration rule called “gainful employment,” that would have penalized for-profit and career colleges for programs that consistently leave graduates with debt they cannot afford to repay.
Stunningly, the administration’s brief is signed by a Biden-appointed Justice Department official who previously was a corporate lawyer representing the for-profit college industry and once contended that the Obama administration had no power to issue a gainful employment rule in the first place.
The gainful employment rule, introduced by the Obama administration, has caromed back and forth as control of the White House has changed, and as the powerful for-profit college industry has repeatedly pressured Washington to gut the measure. The industry doesn’t like the rule because it imperils federal aid to many of their offerings — overpriced, low-quality career training programs that leave many students worse off than when they started, buried in debt because they don’t get the jobs they sought or, even if they do, don’t earn enough to pay back their loans.
In an October 29 filing with a federal court in San Jose, California, the Biden Justice Department asked the judge to send the rule back to the Department of Education, which already has announced it will start proceedings to issue yet another version of the gainful employment rule — Biden overruling Trump overruling Obama. But the Justice Department argues that the judge should not “vacate,” or cancel the Trump rule before sending it to back to the agency.
The case arose when two California teachers, represented by the non-profit law firm Student Defense, sued DeVos in January 2020, asserting they would be harmed from the loss of the Obama gainful employment rule as they sought to pursue graduate students and claiming that the DeVos rule was arbitrary and issued through an unfair process.
The Trump Justice Department tried and failed to get the judge, Edward J. Davila, to dismiss the case, although he did dismiss some aspects of it last year.
In its filing last month, the Biden Justice Department, now representing Secretary of Education Miguel Cardona, said that vacating the DeVos rule would create complications. Vacating the rule would put back into effect a process under the 2014 Obama rule that involved the Department of Education getting data on student earnings from the Social Security Administration. But, the Biden team notes, the Trump administration allowed a data-sharing agreement between the education department and SSA to expire and abandoned efforts to calculate graduate earnings — making it difficult to resume implementation of the 2014 rule. (Actually the Trump administration sabotaged the arrangement with SSA in pursuit of other efforts to protect scam colleges.) The administration also expressed concern that reinstating aspects of the 2014 rule would lead to new, costly litigation; it said its energy was better spent on developing and issuing the new version of the gainful employment rule.
Yesterday, lawyers for the students rejected those arguments and urged the court to vacate the DeVos rule — which they contend was fundamentally flawed — before sending the matter back to the Department of Education. Normally, courts vacate a regulation when they remand it to an agency, unless there is a real threat of harm to the public from doing so, and the students’ lawyers argue that the Department’s rationale for not vacating the rule — alleged internal challenges for government agencies — is not the same as public harm. In addition, there are other aspects of the Obama rule, such as requiring that for-profit colleges disclose certain performance measures to prospective students, that can be implemented without bureaucratic hurdles.
The lawyers for the students also note the real possibility, given all the procedural steps required, that a new Biden gainful employment rule may not go into effect until July 2024, meaning the defective, anti-student DeVos rule could remain in effect for years unless the court vacates it.
Despite the genuine practical difficulties the education department might face in trying to re-install aspects of the 2014 rule — I accept that they exist — it’s troubling that the Biden administration is arguing to keep in place, at least for now, a blatantly anti-student rule issued by Betsy DeVos. There are potential solutions to these complications that would not require keeping the DeVos rule.
The Department stance is more concerning because the Biden Justice Department also has joined forces with DeVos trying to prevent lawyers for a different set of students from taking her deposition in another lawsuit, over her department’s delays and rejections of claims of students defrauded by for-profit colleges. DeVos was relentlessly anti-student as secretary, mocking the claims of ripped-off students for debt relief.
But there’s another fact that makes the Biden stance even worse. The senior Justice Department lawyer on the government’s new brief, as well as the briefs aimed at shielding DeVos from deposition, is Brian Boynton, a Biden appointee who, while at the corporate firm WilmerHale, repeatedly represented the for-profit college industry — and even published a memo claiming that the Obama administration had no authority to issue a gainful employment rule. Given that Boynton already worked on this very issue on the side of predatory colleges, it’s not clear why the Biden Justice Department thinks it’s appropriate for him to be involved in this case now.
UPDATE 11-23-21 1:00 pm:
The group Housing and Economic Rights Advocates (represented by the law firm Gupta Wessler) and the Harvard Project on Predatory Student Lending jointly filed in the case a motion for permission to file an amicus brief supporting the students’ position that the court should vacate the DeVos rule.
The new proposed brief argues that the gainful employment rule’s protections “were particularly important for low-income students, service members, and veterans—groups specifically targeted by unscrupulous education programs.”