JURIST - Paper Chase: For-profit schools file suit seeking to overturn new regulations

[JURIST] The Association of Private Sector Colleges and Universities (APSCU) [official website] on Friday filed suit [complaint, PDF] against the US Department of Education (DOE) [official website] in federal court seeking to overturn three regulations promulgated by the department. The challenged rules are a part of the DOE's final regulations [text, PDF] adopted in October. One rule challenged by the suit would stop deceptive advertising by schools. Another bars recruiters from being paid based on how many students they enroll. A third specifies minimum steps a state must take to authorize post-secondary programs that participate in federal student aid programs. In the complaint, filed at the US District Court of the District of Columbia [official website], APSCU claims the DOE's final regulation's violate both the Higher Education Opportunity Act [text, PDF] and the Constitution. Additionally, the complaint accuses the DOE of not granting private sector schools adequate representation during the negotiation rule-making process. APSCU claims that the DOE rushed the regulatory process for proposals that they knew would not be well-received in order to implement a desired outcome irrespective of the concerns of the stakeholders and the public. The DOE has not yet responded to the complaint.

The new regulations are a part of a larger federal crackdown on for-profit schools that are accused of graduating poorly educated students with high student-loan debt. A report [text, PDF] released by the US Government Accountability Office (GAO) [official website] accused for-profit colleges of promoting fraudulent practices so their students could acquire federal aid, exaggerating potential salary after graduation and failing to provide clear information about costs and duration of programs. Additionally, a 2009 GAO report found that for-profit college students were more likely to default on federal student loans than were students from other colleges.