Seeking to block Education Department regulations of for-profit higher education, the Association of Private Sector Colleges and Universities (APSCU) has filed suit in federal court. The complaint challenges two rules meant to curb aggressive recruiting and a third rule on state authorizations, all due to go into effect on July 1. The suit does not mention the proposed “gainful employment” rule, which links programs’ loan eligibility to previous students’ debt-to-earnings ratios.
While APSCU agrees that misleading students is “unacceptable,” it complains the new regulations permit “severe penalties on schools for inadvertent, insignificant, or innocent statements.”
The trade group, which represents 1,500 for-profit higher education companies, also wants to overturn a ban on merit pay for recruiters who sign up more students.
The third rule requires every state where any student is located to approve a postsecondary program for loan eligibility, “rather than relying on the review of the state in which the school is actually located,” according to the APSCU, which charges this would impede online education programs.
Happily for colleges looking to expand their online footprint without having to jump through regulatory hoops at every turn, the majority of states appear to fall on the more permissive end of the spectrum.
However, Alabama, Arkansas, Louisiana, New Mexico, Indiana, Illinois, Minnesota, Wisconsin, and Wyoming require online institutions to acquire unique licenses to “operate” inside their borders.