## Facts

- The Association of Private Sector Colleges and Universities (APSCU) represented proprietary and career colleges participating in Title IV federal student-aid programs under the Higher Education Act (HEA).
- The Department of Education (DOE), led by the Secretary of Education, issued a set of Title IV “Program Integrity” regulations addressing, among other topics, state authorization, incentive compensation, and misrepresentation.
- APSC U challenged multiple provisions, alleging violations of the HEA and the Administrative Procedure Act (APA), including claims that DOE exceeded statutory authority and failed to provide adequate notice and reasoned decisionmaking.
- The dispute included a state-authorization component affecting institutions offering distance education to students in multiple states.
- The D.C. Circuit’s decision addressed these “Program Integrity” regulations; a separate district-court case later addressed DOE’s 2011 gainful-employment debt-metrics rule.

## Issues

1. Whether DOE acted within its statutory authority under the HEA to promulgate the challenged Title IV “Program Integrity” regulations.
2. Whether any challenged provisions were invalid under the APA because DOE failed to provide adequate notice of the final regulatory requirements.
3. Whether DOE’s rulemaking satisfied APA standards applicable to agency rule adoption and modification.

## Decision

- The D.C. Circuit largely rejected APSCU’s challenges and upheld most of the “Program Integrity” regulations.
- The court vacated a portion of the state-authorization rule on APA grounds because DOE adopted a significant final requirement without providing adequate notice in the proposed rule.
- The court’s discussion framed Title IV participation conditions as aimed at ensuring schools prepare students for employment such that borrowers can repay their loans.

## Legal Principles

- Under the APA’s notice-and-comment requirements, an agency may not adopt a final rule that contains a significant requirement not fairly foreshadowed by the proposed rule.
- In administering conditional federal funding programs like Title IV, an agency has authority to implement statutory eligibility conditions, subject to APA procedural constraints.
- Courts may set aside discrete regulatory provisions that fail APA notice standards while leaving the remainder of a broader regulatory package in place when appropriate.

## Conclusion

The D.C. Circuit sustained DOE’s broad regulatory authority to administer Title IV and upheld most of the “Program Integrity” rules, but it vacated a state-authorization requirement because the agency did not give adequate notice of the final approach during rulemaking.


Ass’n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427 (D.C. Cir. 2012)