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Betsy DeVos Is Being Sued By 17 States Over For-Profit College Rules

The Education Department calls the suit a "legal stunt."

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A group of 18 Democratic attorneys general is suing the Trump administration over its oversight of for-profit colleges, saying that the Education Department's refusal to enforce a regulation punishing predatory career programs "leaves students vulnerable to exploitation and fraud."

Education Secretary Betsy DeVos, who has made a rollback of President Obama's higher education policy a signature piece of her agenda, has begun to dismantle an Obama-era rule called "gainful employment," which cuts off federal financial aid funding to career college programs that saddle students with heavy debt and low salaries.

At the for-profit Art Institutes of Phoenix, for example, students in the fashion design program, which failed gainful employment metrics, took in less than $25,000 a year, but had to pay $6,200 toward their loans — more than 25% of their discretionary income. The rules would have required the program to inform graduates of their poor outcomes, and would eventually have prohibited students from taking out loans to attend.

Earlier this year, DeVos said she would delay enforcement of gainful employment — allowing schools to dodge the rule's requirement, for example, that they tell students their programs were failing the rules. Eventually, she said, she would create a new regulation that would erase Obama's rule altogether.

In a suit filed Tuesday, DeVos's opponents argue that the education secretary is breaking the law by refusing to enforce Obama's rules — which have been repeatedly upheld by courts — despite waves of legal challenges by the for-profit college industry. She is obligated, the Democratic state attorneys general argue, to enforce the regulations as written.

"This is just the latest in a string of frivolous lawsuits filed by Democratic attorneys general who are only seeking to score quick political points," said Education Department spokeswoman Liz Hill in a statement. "While this administration, and Secretary DeVos in particular, continue work to replace this broken rule with one that actually protects students, these legal stunts do nothing more than divert time and resources away from that effort."

DeVos has argued that the gainful employment rules are flawed, saying in a statement in July that they "would unfairly and arbitrarily limit students’ ability to pursue certain types of higher education and career training programs." The department, DeVos said, needed to "get it right" when it came to regulation.

But critics are concerned any new regulations by Trump and DeVos will not do enough to punish bad actors in the for-profit college industry, allowing them to continue taking in federal money despite poor student outcomes.

States sued DeVos earlier this year over another rollback of an Obama regulation, the borrower defense rule, which laid out a process by which students who said they were defrauded by for-profit colleges could apply for loan forgiveness. DeVos told a group of Republican leaders that the rule offered "free money" to any student that "raised his or her hands."

The Education Department has yet to approve a single claim by a defrauded student under DeVos's watch.

Molly Hensley-Clancy is a business reporter for BuzzFeed News and is based in Washington, DC. She covers the intersection of business and education.

Contact Molly Hensley-Clancy at molly.hensley-clancy@buzzfeed.com.

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