Teachers Union Sues Betsy DeVos Over Student Borrower Protections Before its repeal, the gainful employment rule served as a warning to certain colleges: If graduates didn't earn enough money to pay their student debts, schools could lose access to federal aid.
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Teachers Union Lawsuit Claims DeVos 'Capriciously' Repealed Borrower Protections

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Teachers Union Lawsuit Claims DeVos 'Capriciously' Repealed Borrower Protections

Teachers Union Lawsuit Claims DeVos 'Capriciously' Repealed Borrower Protections

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ARI SHAPIRO, HOST:

One of the nation's largest teachers unions is suing Education Secretary Betsy DeVos. As NPR's Cory Turner reports, the American Federation of Teachers says DeVos acted arbitrarily and capriciously when she repealed a rule meant to protect student loan borrowers.

CORY TURNER, BYLINE: The rule is called gainful employment, and it was written during the Obama administration when the Ed Department noticed a disturbing pattern at many for-profit colleges and career training programs.

DAN ZIBEL: Lots of evidence that these sorts of programs were leaving students riddled with debt and no ability to repay the debt.

TURNER: Dan Zibel is representing the teachers union, and he says after the department saw this pattern, it began working on a new rule. It said, if you're a for-profit college or training program and you're claiming to prepare students for gainful employment, we're going to make you prove it. And if your graduates' debts consistently eclipse their earnings, we may cut you off from all federal student loans and grants. Zibel says for many for-profit schools, that threat was a doozy.

ZIBEL: You cut that source of revenue off, you're in pretty deep trouble.

TURNER: Even before the gainful employment rule took effect, in 2015, some schools lowered tuition and raised quality. Steve Gunderson heads Career Education Colleges and Universities, a national organization that represents career training programs. And he remembers many for-profit schools scrambling to improve to avoid a reckoning with the Ed Department.

STEVE GUNDERSON: The opponents of the sector should just declare victory and go home because their message was heard, and the sector responded.

TURNER: But hundreds of programs did not improve. And before the rule could fully kick in, Betsy DeVos repealed it, saying it unfairly targeted the for-profit sector. In its place, says Dan Zibel, the department left a hole.

ZIBEL: This is not them changing the definition of gainful employment. This is them simply deleting the entire regulatory structure and not replacing it with anything.

TURNER: In a statement, Ed Department Spokesperson Angela Morabito says the department will vigorously defend its final regulation rescinding this deeply flawed rule. When I reached the head of the American Federation of Teachers, Randi Weingarten, it was a windy day in Puerto Rico, and she was surveying earthquake damage. Weingarten says she hopes this lawsuit sends a clear message to DeVos.

RANDI WEINGARTEN: Protect the students of the United States of America, not the for-profit entities that are making a buck off of them.

TURNER: The department insists it is protecting students. Instead of the government policing some schools, the department says it's putting important debt and earnings data online for all schools for all to see. This way, says Steve Gunderson, students can decide for themselves what programs aren't working.

GUNDERSON: I really think that what the department has done will turn out to be the most significant public policy to protect prospective students across the board.

TURNER: Critics, of course, see the repeal very differently, that this new policy is essentially caveat emptor - buyer beware. Students are now on their own as they try to find a program that will truly prepare them for gainful employment.

Cory Turner, NPR News, Washington.

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