Education Department Granted Stay in Lawsuit Over Biden Admin Rules for Career Schools

The U.S. Department of Education building in Washington on June 10, 2024. Madalina Vasiliu/The Epoch Times

The U.S. Department of Education has been given more time to outline its position on a lawsuit challenging Biden-era regulations aimed at rooting out poorly performing career schools.

A federal judge in Texas on Monday approved the department’s request to keep the case on hold for an additional 90 days so it can familiarize itself with the issues in the case. The extension pushes the deadline for the department’s final response from Feb. 14 to May 16.

At the center of the lawsuit are Biden administration’s “gainful employment” rules, which judge career training programs based on how much debt their graduates take on compared to the income that they go on to earn. The rules’ stated goal is to protect students against low-quality programs, said to provide little to no financial benefit and often leaving students burdened with debt, by instead paying for much of the debt with taxpayer dollars.

Under the rules, scheduled to take effect last July but currently on hold, career education programs must demonstrate that their graduates earn enough money to be able to afford paying down their federal student loans and earn more than the median salary of people in their state with no education beyond high school. Programs failing either of these tests for two consecutive years risk losing their access to federal financial aid.

The lawsuit challenging these regulations was filed in December 2023 by the national trade association of cosmetology schools. The group argues that the rule sets unfair standards for student performance and post-graduation earnings, potentially threatening the “very existence” of those schools.

A key point of contention is the use of the debt-to-earnings comparison, which the lawsuit argues is a flawed measure when it comes to beauticians. The complaint states that graduates of the plaintiffs’ schools carry a median debt of about $8,900 but their true earnings are often underreported due to the tip-based nature of the beauty service industry.

Most of the school’s students receive Pell Grants, an indicator of middle- and low-income backgrounds. The schools provide opportunities for individuals who “have no realistic chance of attending a traditional four-year institution of higher education,” the lawsuit states.

The Trump administration has yet to indicate how it plans to handle the gainful employment rule. The Senate has not yet confirmed President Donald Trump’s nominee for education secretary, Linda McMahon.

During Trump’s first term, Education Secretary Betsy DeVos rescinded a previous version of these regulations. McMahon is expected to take similar action.

But as the president expresses interest in working with Congress to dismantle the Education Department altogether, it’s uncertain how the lawsuit might play out.