The for-profit education industry has taken some hard knocks lately, from the bankruptcy of Corinthian Colleges to securities fraud allegations against ITT Educational Services. On Wednesday a federal judge dealt the beleaguered industry another blow, tossing a lawsuit that challenged the government’s efforts to curtail financial aid for ineffective college vocational programs.
Siding with the U.S. Department of Education, U.S. District Judge Lewis Kaplan in Manhattan agreed to throw out the case, which was brought by the Association of Proprietary Colleges in November. The APC, an industry group representing New York’s for-profit schools, had challenged recent DOE rule-making related to so-called gainful employment requirements in the laws that govern federal financial aid. The group is represented by Michael Hays at Cooley.
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