- A federal judge in New York decided against a group of for-profit colleges arguing the Obama administration’s proposed rule about gainful employment was unconstitutional and arbitrary.
- Inside Higher Ed reports the colleges argued their due process rights would be trampled if the administration could cut off student loan funding based on the new metrics but the judge said the schools had no "vested right" in that funding.
- The colleges further argued the administration was arbitrary in changing its rule from a previously litigated metric about repayment rates to the current version, which measures student debt loads relative to their earnings, but the judge found the change to be carefully considered, according to the article.
The Obama administration had to shift to the new metric after its original rule was struck down by a judge in 2012. The new measures are schedule to take effect July 1 but this court case is only the first of two that could block it again. The second case is scheduled to be decided in Washington, D.C. The gainful employment regulation is targeted at for-profit career schools. Many of these schools have been criticized for charging students excessive amounts and ill-preparing them for promised new careers. The rules would also apply, however, to nonprofit trade schools, including community colleges that specialize in career certificates.