New Sheriff, New Rules?
By Jonathan D. Glater
There is a certain irony in the choice of tactics in last week’s lawsuits filed in response to the Education Department’s effort to back away from Obama-era rules that created a process for indebted students to get out of their loan repayment obligations if the institution they attended made false or misleading statements. The 19 states that filed a federal lawsuit in Washington, D.C., are making the same kind of argument that for-profit higher education providers used in their lawsuit against prior efforts to regulate in this area.
In their complaint, the states, which include Massachusetts, California, and New York, charge that the Department’s effort to postpone implementation of the rules violates the Administrative Procedures Act, or APA.
(The Department’s move was announced in a press release, and a prior blogpost assessing it is here. The rules at issue, which were announced in October and were to take effect on July 1, are here.)
While the Department justified the decision to delay implementation of the rules by citing pending litigation filed by the California Association of Private Postsecondary Schools, the states argued in their complaint that not every rule subject to delay had been targeted in the trade group’s lawsuit.
According to the states, the Department’s delay of the rule must itself be subject to notice and comment, like any new rule, and the Department’s failure to do so constitutes a violation of the APA. Through litigation, the states hope to have a judge order implementation of the rules.
To appreciate the irony, you have to let your mind wander way back to 2011. That’s when the Association of Private Sector Colleges and Universities sued the Education Department to block implementation of the “gainful employment” rules, which among other things would have imposed penalties on institutions if the ratio of their students’ debt to income exceeded a specified level. The trade group’s lawsuit succeeded in delaying full Education Law Prof Blog:
