Steve Gunderson, president of the Association of Private Sector Colleges and Universities, said his constituents “were left with no choice but to file suit.”
The lawsuit is in response to a rule the Obama administration announced last week that requires career training programs to show their graduates make enough money to pay back their loans. Programs that don’t pass the new “gainful employment” standard risk losing the ability to receive federal student aid. The administration estimated that about 1,400 programs serving 840,000 students won’t pass.
“This regulation, and the impact it will have on student access and opportunity, is so unacceptable and in violation of federal law that we were left with no choice but to file suit,” said Steve Gunderson, president of the Association of Private Sector Colleges and Universities.
Gunderson’s association filed the lawsuit against Education Secretary Arne Duncan. It says the new rule is “unlawful, arbitrary, and irrational” and will needlessly harm millions of students who attend these schools.
An Education Department spokeswoman declined to comment on the lawsuit.
For-profit colleges offer training in areas such as auto repair and nursing and have been popular with nontraditional students, including veterans. About 1.3 million students enrolled last spring at a for-profit school, according to the National Student Clearinghouse Research Center.
The industry has among the highest student loan default rates and lowest graduation rates in higher education, and critics say taxpayers bear too much of a burden to keep them afloat.
