• April 23, 2014

Judge Sides With For-Profit Colleges in Challenge to 'State Authorization' Rule

A U.S. District Court judge has struck down a portion of the Education Department's controversial "state authorization" rule but upheld a pair of rules barring deception in college recruiting and commissions for college recruiters.

In an opinion issued Tuesday, Judge Rosemary M. Collyer of the U.S. District Court for the District of Columbia tossed out a requirement that colleges offering online programs to students in other states had to seek approval from each of those states. Colleges had not been given adequate time to review the rule and comment on it, Judge Collyer wrote.

Her decision was cheered by the Association of Private Sector Colleges and Universities, which sued the department in January over the state-authorization requirement, and over the department's "misrepresentation" and "incentive compensation" rules. In a statement issued Tuesday evening, the group called the ruling "a major victory for innovation in higher education and an important answer to the department's obvious overreach in this area."

The association expressed disappointment with the judge's decisions upholding the other rules, however, and said it was considering an appeal.

Justin Hamilton, a spokesman for the Education Department, said the department was "happy that the court fundamentally upheld the three regulations challenged by APSCU."

He added that the department was "still reviewing the opinion and considering our options on the one portion of our state-authorization regulation that the court did not affirm."

The state-authorization rule had been opposed not only by for-profit colleges, but by college lobbyists across all sectors of higher education. Colleges had cited the cost of seeking authorization in every state where they enrolled students as a prohibitive factor, and Republicans in Congress had begun work on legislation to repeal the rule.

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