Thursday, May 28, 2015

For "gainful employment" second time is the charm.

A federal judge in New York has ruled that (1) the Department of Education has the right to issue such regs, and (2) its second effort (after the first iteration lost in the courts) passed muster under the due-process clause of the 14th Amendment.
https://www.insidehighered.com/news/2015/05/28/federal-judge-tosses-profit-colleges%E2%80%99-challenge-%E2%80%98gainful-employment%E2%80%99-rule

The for-profit challengers claimed that, when DOE cuts federal funding due to grads' failure to get jobs and repay their loans, the constitution is offended.  The court didn't agree.

Fact is, as I have have said many times in this space and elsewhere, the entire for-profit higher ed business model is fatally flawed.  All too often that model has been (1) recruit the unqualified, (2) help them get federal loans to pay tuition, (3) watch as they drop out and default on the loans, while (4) the company pockets the profits.  Not unlike  money laundering in its way.  Throw in illegal incentives to admissions staff --- something Phoenix has been fined for multiple times --- and the scheme is complete.  Should the courts really be ex[ected to sanction that?

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