Education Department sued over gainful employment rule
Laura Spitalniak
January 5, 2024
The American Association of Cosmetology Schools said the rule is based on a “flawed” debt-to-earnings ratio.
Dive Brief:
The U.S. Department of Education is being sued over its new gainful employment rule by a trade organization representing postsecondary beauty schools.
The American Association of Cosmetology Schools, along with one of its members, filed the lawsuit in federal court late last month seeking to stop the rule’s forthcoming implementation on July 1. Chief among their complaints is that the rule’s debt-to-earnings ratio is a flawed metric and fails to properly track income for tipped workers like beauticians.
AACS argues the regulation is arbitrary and that the department overstepped its authority in adopting it. The organization also says the rule violates its institutions’ and students’ First Amendment right to free speech, since it will selectively restrict colleges’ ability to operate.
Dive Insight:
In September, the Education Department unveiled its long-awaited gainful employment regulation. The agency predicted the rule would prevent about 700,000 students nationwide from enrolling in low-performing career programs.
