Amendment to Remove Gainful Employment Rule Spending Limitation Fails in House Approps Committee

The House Committee on Appropriations is currently considering the draft appropriations bill passed by the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on June 17.  As mentioned previously, Section 309 of this bill contains a limitation on the use of funds to implement and administer the gainful employment rule.  Rep. Rosa Delauro (D-CT) offered an amendment (at 5:24 in the video) to remove this limitation from the  draft.  Rep. Tom Cole (R-OK) rose to the defense of the provision.  The amendment failed on a voice vote.

Analysis of APC v Duncan – NY Case Upholding Gainful Employment Rule

On May 27, 2015, in Association of Proprietary Colleges v. Duncan, the District Court for the Southern District of New York ruled that the U.S. Department of Education’s (“Department”) “Gainful Employment” rule was valid in its entirety. The Court also held that:

  • Proprietary colleges do not have a constitutionally protected property or liberty interests in their continued eligibility to participate in federal funding programs under the Higher Education Act (“HEA”), and the GE Rules afford affected schools all the due process that is constitutionally due.
  • The GE rules do not have a retroactive effect.
  • The GE Rules are a reasonable interpretation under the HEA of an ambiguous statutory command.
  • The GE Rules – and the debt-to-earnings ratios (“D/E rates”) contained therein – are the product of reasoned decision making and are not arbitrary or capricious.

For more information, please review our analysis of this decision.