Judge Finds Defense of School Disclosure Rule Rollback ‘Funny’

SAN FRANCISCO (CN) - The U.S. Department of Education is relying on a "funny argument" to defend its rollback of an Obama-era rule that would require online schools to warn incoming students about the quality of their programs, a federal judge said in court Friday.

"The whole point of a regulation is to put the burden on the person best able to bear it, to disclose that information," U.S. Magistrate Judge Laurel Beeler said. "It seems like a funny argument to say you can do it yourself."

Beeler was responding to a Justice Department lawyer's suggestion that students could do their own research to find out if their educational programs lost their accreditation status.

The dispute stems from the delay of a rule that would require online and correspondence schools to disclose whether their programs meet state requirements or received sanctions by a state or accrediting agency. The rule was finalized in December 2016 and set to take effect on July 1, 2018.

But under the leadership of Education Secretary Betsy DeVos, the department decided to delay the rule after receiving two letters from higher education interest groups in February 2017 complaining of "widespread concern and confusion" about the new requirements. Two days after the rule was meant to take effect, the department announced that it needed a two-year delay to reconsider the regulation.

The National Education Association (NEA), a labor union representing teachers and aspiring educators, sued DeVos in August, claiming the "delay" rescinded a final rule without a negotiated rulemaking process as required by the Higher Education Act.

The NEA, which is the nation’s largest labor union, argues the rollback will harm aspiring teachers’ careers by keeping them in the dark about whether the programs they seek to enroll in are in good standing. They claim employers will not hire them if state licensing and accreditation problems render their educations less valuable.

In court Thursday, U.S. Justice Department lawyer Stuart Robinson insisted the teachers union cannot sue the government because merely being deprived of information is not enough to establish standing.

"An informational injury is an intangible harm and as such it can only be recognized as an injury if Congress raises it to the status of a tangible harm," Robinson said.

Robinson argued the plaintiffs' theory of standing relies on a series of hypothetical situations, including not receiving information about a bad program, enrolling in that bad program, graduating from a program deemed low-quality by employers, and losing out on a job opportunity because of that.

Representing the teachers union, attorney Martha Fulford argued the injury is more than just hypothetical. She cited a sworn statement by aspiring teacher and co-plaintiff Stephanie Portilla, who found out her school was being audited by the Department of Education's Office of Inspector General. Portilla, who lives in Monterey County, said she doesn't know if her program still meets state certification requirements. Without that knowledge, she cannot make an informed decision about whether to use her limited grant money to continue the program or transfer to another school.

Despite that evidence, Robinson continued to cling to his assertion that the harm was too speculative to establish a right to sue.

The judge disagreed.

"The harm here is going to a substandard school and not being able to get your degree," Beeler said.

Beeler plans to issue a written ruling by Monday.

The California Teachers Association and two teachers enrolled in higher education programs, Shane Heinman and Kwynn Uyehara, are also named as plaintiffs in the lawsuit.

The rollback of the disclosure rule for online schools is one of several reversed Obama-era regulations embroiled in court challenges. DeVos' Education Department is also fighting lawsuits over the elimination of protections for defrauded student borrowers and rules aimed at identifying racial disparities in special needs programs.

The Department of Education announced Thursday that it would wipe out $150 million in loan debt for 15,000 students defrauded by for-profit colleges after losing a court battle over its efforts to eliminate the 2016 "borrower defense" rule.

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