News Release, Office of the Maryland Attorney General

BALTIMORE, MD (June 24, 2020)– Maryland Attorney General Brian E. Frosh joined 18 other attorneys general in filing alawsuitto stop U.S. Education Secretary Betsy DeVos from eliminating critical protections for students considering enrolling in for-profit colleges and vocational schools.

For years, for-profit and vocational colleges engaged in fraudulent and abusive practices – including deceptive marketing – to convince students to enroll in useless academic and training programs. Those practices left students across the country with piles of debt and limited or no job prospects in their field to pay off that debt.

In 2014, the Department of Education issued a rule holding for-profit institutions accountable for the future success of their students and requiring programs to warn students about the dangers of enrolling and ultimately would have made the worst offending programs ineligible to enroll students using federal financial aid. This rule was known as the Gainful Employment Rule, named for the provision in the Higher Education Act, which it enforced.

In a new rule set to take effect next week, the Department of Education has repealed the Gainful Employment Rule’s protections with the Repeal Rule, which is a license for for-profit colleges to take advantage of students looking to find educational programs to help advance their careers.

“Secretary DeVos continues to work against students instead of protecting them from the worst programs at for-profit educational institutions,” said Attorney General Frosh. “By eliminating these crucial protections, students will fall prey to unscrupulous institutions, increasing the number of students who will end up in programs that offer nothing other than unmanageable debt.”

The Repeal Rule will injure Maryland and its taxpayers in several important ways:

  1. Students will use state aid designed to help their residents better their lives to instead, unwittingly, enroll in worthless for-profit programs;
  2. Instead of enrolling in public institutions of higher education that states have established to make the crucial benefits of higher education available to everyone, students will enroll in worthless proprietary or vocational programs, causing taxpayers to lose the value of their investment in state systems of higher education;
  3. Now that the U.S. Department of Education has decided to stop regulating for-profit colleges, students will look to states to make sure predatory institutions selling substandard programs are held accountable; and,
  4. Despite states’ increased enforcement efforts, more students will enroll in worthless programs run by proprietary institutions, forcing more students to carry an inordinate financial debt load.

The states’ lawsuit says Education Secretary DeVos’ “decision to repeal the GE Rule without promulgating any alternative standard for implementing the Higher Education Act’s Gainful Employment provision is arbitrary, capricious, and contrary to law … and must be set aside.”

 In addition to Maryland, the lawsuit was joined by the attorneys general of Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Wisconsin.