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Education Dept. Defends Gainful Employment

March 30, 2017
 
 

The Trump administration defended the gainful-employment rule in federal court Wednesday, suggesting that it may not quickly roll back the regulation designed to crack down on programs graduating students unable to pay down high student loan debt loads.

The American Association of Cosmetology Schools filed a lawsuit in February to block the rule, arguing that gainful-employment data undercounted income of cosmetology program graduates. The suit argued those workers depend on gratuities and cash payments, while many underreport income. Administration lawyers argued on behalf of Education Secretary Betsy DeVos in a court filing Tuesday that challenges to the rule itself had already rejected by the courts, that no cosmetology program has yet to have access blocked to Title IV aid, and that the association had failed to provide evidence that underreporting of income was widespread among cosmetology graduates.

Republican lawmakers have been outspoken in their criticism of the gainful-employment rule, which was issued last year after two rounds of negotiated rule making and multiple court battles. DeVos declined in a January confirmation hearing to commit to enforcing the rule in response to questions from Senator Elizabeth Warren, a Massachusetts Democrat.

The department earlier this month pushed back deadlines for programs to submit appeals of debt-to-earnings ratios, raising concerns among proponents of the rule that the administration would not aggressively enforce it.

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