Analysis of APC v Duncan – NY Case Upholding Gainful Employment Rule

On May 27, 2015, in Association of Proprietary Colleges v. Duncan, the District Court for the Southern District of New York ruled that the U.S. Department of Education’s (“Department”) “Gainful Employment” rule was valid in its entirety. The Court also held that:

• Proprietary colleges do not have a constitutionally protected property or liberty interests in their continued eligibility to participate in federal funding programs under the Higher Education Act (“HEA”), and the GE Rules afford affected schools all the due process that is constitutionally due.
• The GE rules do not have a retroactive effect.
• The GE Rules are a reasonable interpretation under the HEA of an ambiguous statutory command.
• The GE Rules – and the debt-to-earnings ratios (“D/E rates”) contained therein – are the product of reasoned decision making and are not arbitrary or capricious.

For more information, please review our analysis of this decision.