Association of Private Sector Colleges and Universities Files Suit Against U.S. Department of Education

The Association of Private Sector Colleges and Universities, which represents 1,400 for-profit schools, has filed a lawsuit against the U.S. Department of Education and the Obama Administration. The complaint was filed with the U.S. District Court for the District of Columbia and states that the Obama Administration’s new gainful employment ruling is “unconstitutional and would hurt millions of stunts in those colleges.”

The new rulings in question were introduced by the Department of Education at the end of October. These new regulations were set in place to ensure that students attending for-profit schools are not weighed down by student debt and lackluster employment prospects.

President of the Association of Private Sector Colleges and Universities, Steve Gunderson, releases a statement saying “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.”

Federal funding is at stake for the for-profit schools that have an annual loan payment of more than 20 percent of a student’s income or if it is more than 8 percent of the student’s total earnings. The gainful employment ruling will officially take effect in July of 2015.

The Education Department says that just two years at a for-profit school can cost a student almost 4 times as much as it would to attend a community college or other public school. Currently 44 percent of all student loans in default from federal lenders come from for-profit schools, with only 11 percent of the total college graduates coming from these schools.

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