September 24, 2021

A judge ruling vacated a core element of the “gainful employment” rule!

A federal judge’s weekend ruling vacating a core element of the “gainful employment” rule was welcomed Monday by the for-profit college industry.  Many see this as vindication of their challenge to the controversial rule.

The decision however, affirmed the Department of Education’s authority to issue the rule, and advocates for tougher regulation including calling on the government to respond with new guidelines that would not be rejected for lack of a “reasoned basis.”

In striking down the regulations the court stated the following,
“The debt repayment standard was not based upon any facts at all. No expert study or industry standard suggested that the rate selected by the Department would appropriately measure whether a particular program adequately prepared its students. Instead, the Department simply explained that the chosen rate would identify the worst-performing quarter of programs…That this explanation could be used to justify any rate at all demonstrates its arbitrariness…This is not reasoned decision making. (“[I]n the absence of any reasonable justification,” the court “must conclude that this aspect of the [rule] is arbitrary and capricious.”
APSCU v. Duncan, pg. 31, 11-1314 (RC) (6/30/12)

Weighing Next Steps

A spokesman for the Education Department said Monday that officials there would decide “very shortly” whether to appeal the ruling, develop new regulations, or “do both.”

the courts decision can be found here: 

chronicle article here:

APSCU letter to Arne Duncan in response to the ruling here:


Debt to Degree a new report correlating debt & degree completion

Education Sector has created such a measure, the “borrowing to credential ratio.”For each college, we have taken newly available U.S. Department of Education data showing the total amount of money borrowed by undergraduates and divided that sum by the total number of degrees awarded.

The results are revealing:

• Nationwide, the overall borrowing to credential ratio has risen sharply in recent years.

• Certain segments of the higher education industry—in particular, for-profitcolleges—are racking up far more student debt per degree than others.

• State policies matter a great deal, with seemingly similar public university systems achieving widely varying results for students.

• Among elite colleges and universities, some are making good on their pledgeto help low- and middle-income students graduate without major financialburdens while others are riding a wave of student debt to fame and fortune.

Keep in mind that this formula does not take into account the enrollment growth and thus lack of time for those new students to graduate, thus in many of the for profits case their number are artificially high as if they added 5000-35000 new students their numbers are significantly elevated due to their newness and do not reflect actuals.  This is a decent indicator for those schools with consistent flat enrollments

managing-student loan-debt

but not for those with rapidly changing enrollments.  Thus, those schools with declining enrollments may show better that actual results while those with enrollment growth will show higher inaccurate debt amounts.

 click here to viewreport: