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Teachers Sue Betsy DeVos Over Student Loans

This article is more than 4 years old.

A major teachers union is suing Secretary of Education Betsy DeVos — again.

Here’s what you need to know.

The Lawsuit

The American Federation of Teachers (AFT) sued DeVos and the Department of Education for repealing an Obama-era regulation that they claim leaves student loan borrowers stuck with “tens of thousands of dollars of student loan debt” and “worthless degrees.”

The complaint alleges that DeVos repealed the “gainful employment” rule that would have protected students from for-profit colleges and universities. The gainful employment rule was created to ensure that students earned enough money from employment after graduation to repay their student loans. For a college to have access to federal student aid, a typical graduate’s debt at that school must not exceed both 8% percent of their total income and 20% of their discretionary income.

The AFT claims that without the gainful employment rule, students cannot make informed decisions about which college or university to attend. As a result, student could default on their student loans at a higher rate, which could cost taxpayers $5.3 billion.

Betsy DeVos Position

DeVos believed the the gainful employment rule was confusing and unfairly targeted for-profit schools. DeVos has said she wants to strike a fair balance between protecting students from predatory practices and creating balanced rules to which colleges can adhere. In November, DeVos released an updated scorecard, which reports the median earnings and median debt of a college or university’s graduates for a chosen field of study.

"My first priority is to protect students," DeVos said in 2017 about gainful employment, and another rule, borrower defense to repayment. "Fraud, especially fraud committed by a school, is simply unacceptable. Unfortunately, last year's rulemaking effort missed an opportunity to get it right. The result is a muddled process that's unfair to students and schools, and puts taxpayers on the hook for significant costs. It's time to take a step back and make sure these rules achieve their purpose: helping harmed students.” 

DeVos repealed the gainful employment rule last June.

Why Gainful Employment Matters

Gainful employment is one rule that helps increase disclosure, transparency and accountability for colleges and universities. The goal is to help students assess and measure the outcome of a particular school and degree program. In particular, students want to understand job placement rates, degree completion rates, and how many students pay off their student loans, among other metrics.

Next Steps

As Washington debates the gainful employment rule, make sure you understand all your student loan repayment options. You can explore:

This student loan quiz takes less than one minute to complete and provides you with a free, customized student loan repayment plan.

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