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Veterans Affairs Chair: Full Benefits for Veterans Hit by Closures

Tennessee Republican Phil Roe, the chairman of the House veterans affairs committee, will amend an update to the Post-9/11 GI Bill to include full restoration of benefits for veterans affected by the sudden closure of for-profit institutions including ITT Tech and Corinthian Colleges. Current language in the legislation, which received a hearing Monday, restores only a semester's worth of benefits for GI Bill recipients.

The Veterans of Foreign Wars said Monday the bill was a "good first step" but called for full restoration of benefits for each month of GI Bill benefits used at a closed institution.

Roe's plans to amend the legislation were originally reported by Politico. A spokeswoman for the chairman said the change would likely be made during a markup of the bill today.

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House committee moves ahead with ambitious expansion of GI Bill

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The GI Bill update, the first since 2011, removes 15-year time limit for benefits and awards semester of aid to veterans affected by closures of for-profit colleges.

Accreditor Rejects Sale of 2 Art Institutes

Middle States Council on Higher Education, the accreditor for the Art Institute of Pittsburgh and Art Institute of Philadelphia, rejected the sale of both Education Management Corporation institutions to the Dream Center Foundation, according to a decision posted last week.

The council cited "insufficient information and evidence" in denying EDMC's request, although the for-profit can resubmit the request with additional information.

The Dream Center, which is a religious missionary organization based in Los Angeles, announced plans to buy EDMC in March. The foundation plans to keep the EDMC institutions -- Argosy University, South University and the Art Institutes -- secular after the sale is approved and finalized. The sale remains under review by the U.S. Department of Education, as well.

Middle States also took action on financial problems at the Art Institute of Philadelphia and warned that the institution's accreditation may be in jeopardy because of a failure to show "documented financial resources, funding base and plans for financial development adequate to support its educational purposes." The institute has to submit a report by Sept. 15 showing evidence it meets standards.

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Battle Lines Drawn on Regulatory Rewrite

Student advocates and representatives of higher education institutions laid out their positions Monday on the next round of regulatory rule making at the Department of Education. And those public comments -- the first step in the process to overhaul two major Obama-era regulations -- offered few surprises on the positions of the various parties.

Education Secretary Betsy DeVos last month announced that she would pursue a rewrite of the gainful-employment and borrower-defense regulations. She also said she would suspend enforcement of the latter rule, citing ongoing legal challenges.

Since that announcement, DeVos has also said she will delay certain disclosure provisions of the gainful-employment rule, which holds career training programs responsible for poor debt-to-earnings ratios for graduates.

Student advocates called for the department to enforce the gainful-employment rule, which remains on the books.

"It is the department’s job to make sure taxpayers do not continue to subsidize failing programs," said Jennifer Wang, D.C. office director of the Institute for College Access and Success.

Advocates also called for the department to enforce a ban on mandatory arbitration agreements that is part of the borrower-defense rule.

Representatives of the for-profit sector called for the gainful-employment rule to be applied to all programs receiving Title IV aid regardless of sector, for reporting requirements to be streamlined and for ratings to reflect long-term earnings of graduates as well as geographic variation in income.

The United Negro College Fund and the National Association of Independent Colleges and Universities also called for a separate panel to separately consider financial responsibility provisions of the borrower-defense rule.

DeVos will appoint separate negotiated rule-making committees to take up each rule later this year, likely starting in November or December. The second public comment hearing ahead of the negotiated rule-making process is Wednesday in Dallas.

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Attorneys General Sue DeVos

Led by Massachusetts Attorney General Maura Healey, 18 states and the District of Columbia filed a lawsuit against Education Secretary Betsy DeVos Thursday seeking to have borrower defense to repayment regulations enforced by the department.

The borrower-defense rule, which was finalized by the Obama administration last year, provides a process for students to have their federal loans discharged if they are defrauded by their school. DeVos announced last month that she would suspend enforcement of the regulations and seek to overhaul them through a negotiated rule-making process.

The attorneys general argued in the lawsuit that she violated federal law in delaying the rule. DeVos justified the delay by citing pending litigation challenging the rule filed by a California association of for-profit colleges. But the attorneys general argued that the case was a "mere pretext for repealing the rule and replacing it with a new rule that will remove or dilute student rights and protections."

In a conference call with reporters, Healey said the Trump administration and DeVos have sided with the for-profit sector over students since "day one" and that borrower defense would protect students and taxpayers.

Liz Hill, a spokeswoman for DeVos, said in a statement that the lawsuit brought by the Democratic attorneys general was "ideologically driven." And she said the challenge from the California for-profits raised "serious and credible charges" regarding the rule.

"The borrower-defense regulations suffer from substantive and procedural flaws that need to be considered before imposing new burdens on regulated parties that will come at a cost to taxpayers of $14.9 billion in the next 10 years," she said. "That is why the secretary decided it was time to take a step back and hit pause on these regulations until this case has been decided in court and to make sure these rules achieve their purpose: helping harmed students."

In a separate lawsuit Thursday, Public Citizen and the Project on Predatory Student Lending sued the department over the borrower-defense delay on behalf of two students who attended the for-profit New England Art Institute in Massachusetts.

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FTC Refunds Former DeVry Students

The Federal Trade Commission began mailing more than $49 million in refund checks to former DeVry University students Wednesday as part of a settlement between the for-profit institution and the agency. DeVry agreed to the $100 million settlement after the FTC sued the institution for its use of employment statistics in advertising.

The 173,000 refund checks will go to students who attended the college between 2008 and 2015; paid at least $5,000 with cash, loans or military benefits; did not benefit from debt or loan forgiveness; and completed at least one class credit. The checks, however, will expire 60 days after they are mailed.

In a separate settlement, former DeVry students in Massachusetts will also receive about $455,000 in refunds due to a suit against the institution for allegedly misleading students about job placement rates.

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Judge Partially Blocks Enforcement of Gainful-Employment Rule

A federal district court judge issued an order Wednesday partially blocking enforcement of the gainful-employment rule for cosmetology schools that sued in February to halt the regulation.

The Department of Education defended gainful employment in court in March but earlier this month announced it would pursue a rewrite of the regulation along with the borrower-defense rule.

The judge ordered that the cosmetology schools be given more flexibility in filing appeals of earnings data and that the department must give those schools more time to file appeals. The order applies only to American Association of Cosmetology Schools programs and was written to avoid "upending the entire GE regulatory scheme."

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Advocates say department inaction, forced arbitration leave defrauded borrowers in bind

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Student advocates say Education Department’s slow processing of borrower-defense claims and blocking of ban on mandatory arbitration put defrauded borrowers in a bind.

Hickey College Will Shut Down

Hickey College, a small for-profit career institution located in St. Louis, will shut down due to low enrollment, the St. Louis Post-Dispatch reported.

The college, founded in 1933, offers degrees and certificates in accounting, culinary arts and graphic design, among other programs. It enrolls 391 students, according to federal data. Hickey is overseen by the Accrediting Council for Independent Colleges and Schools, a national accreditor that the Obama administration decided to terminate last year.

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Former For-Profit Students Intervene in Borrower-Defense Lawsuit

Two former students of an Education Management Corporation-owned for-profit college have filed suit to intervene as defendants in a lawsuit challenging borrower-defense regulations.

The Department of Education cited the lawsuit, which was brought by an association of California for-profit colleges, in announcing a delay of the borrower-defense rule this week.

The students attended New England Institute of Art in Massachusetts and were subject to a forced-arbitration clause blocking students from bringing suit together. They planned to file a lawsuit against the for-profit alleging violation of the Massachusetts Consumer Protection Act after the borrower-defense rule's prohibition on enforcement of forced-arbitration clauses took effect.

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