New York State Attorney General Letitia James in April. Photo: Diego M. Radzinschi/ALM

New York Attorney General Letitia James on Wednesday joined 18 other states in suing U.S. Department of Education Secretary Betsy DeVos to stop her from repealing an Obama-era rule that seeks to protect students from for-profit colleges' predatory marketing.

Calling the Education Department's repeal of the rule both "unjustified and illegal," James is part of a 56-page lawsuit that asks a federal court to declare DeVos' repeal, set to take effect July 1, both "arbitrary and capricious" and to vacate the repeal as "unlawful," according to a news release from James' office Wednesday and the newly filed complaint.

The Education Department's repeal of the rule "is yet another example of the Trump Administration's continued efforts to dismantle critical safeguards protecting students and taxpayers in order to further the interests of for-profit colleges," James said in the news release. "We are standing up for students" and trying to stop an "improper repeal of a rule that plays a vital role in ensuring students can make informed decisions about their education," she added.

The 19 states that are plaintiffs in Wednesday's federal action lodged in Washington, D.C., are controlled by Democratic governors. They include Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Wisconsin, and the District of Columbia. And in the complaint, the states' attorneys general argue the Education Department's repeal of the rule, known as the "Gainful Employment" rule⁠—will "harm students."

Before the 2014 institution of the rule by the Obama administration's Education Department, "scores of students took on loans to enroll in programs [largely run by for-profit colleges and vocational schools] that offered a worthless education, a key contributor to a national student debt crisis," James and the other attorneys general argue in the complaint.

"In egregious cases," they also contend, "students' harmful enrollment decisions were the consequence of unscrupulous recruiting practices by predatory for-profit institutions," and "in the current economic downturn, there is a large pool of people eager to pursue educational opportunities."

"But with [Secretary DeVos'] Repeal Rule, the [Education] Department has reverted to the conditions that allowed for-profit schools to steer students into useless programs" via fraudulent or predatory marketing, they say.

In an email, Angela Morabito, press secretary for the Education Department, responded to a request for comment on the attorneys general lawsuit by saying that "the Department will vigorously defend its final regulation rescinding this deeply flawed [Gainful Employment] rule."

The Gainful Employment rule was set up to determine whether an educational program "prepared students for 'gainful employment in a recognized occupation' through a simple comparison of a program's graduates' debt and earnings," the complaint says.

"By August 2018, 65% of the programs that failed the Department's metrics had closed or had been modified because they did not provide adequate post-graduation value," it also states, adding that "several for-profit institutions that closed were notorious for saddling students with enormous debt loads while offering very little earning potential."

Under the Gainful Employment rule, "programs that did not pass under that metric were directed to publish warnings alerting current and prospective students of that program's disproportionate costs and benefits," says the complaint. Moreover, "programs that repeatedly and flagrantly failed the Department's standard would have become ineligible to enroll students benefiting from Title IV aid," meaning potentially billions of dollars of various student aid given under Title VI of the Higher Education Act of 1965.

In 2019, DeVos issued a final rule repealing the Gainful Employment rule, the complaint says. According to plaintiff states, among the reasons given by the Education Department, which along with DeVos is a defendant, for the repeal was a "purported 'disparate impact' on for-profit schools and related concerns that the 2014 Rule 'failed to equitably hold all institutions accountable [for] student outcomes' and was 'under-inclusive' because it did not apply to all schools."