The federal court recently ruled in favor of the American Association of Cosmetology Schools (AACS), which challenged the Gainful Employment regulation as it applied to cosmetology schools that train for careers that often have under-reported incomes. 

The judge appears to be have agreed that there are fields like cosmetology that have under-reported wages, but that the Gainful Employment regulation has problems accounting for the under-reported wages.

The judge also indicated that a remedy already exists in the regulation to correct this problem through the alternative earnings appeal process in where schools may survey graduates and/or use state data systems to appeal their earnings calculations.

The judge also said the existing remedy in the regulation is flawed, cumbersome, and difficult to achieve and he ordered the US Department of Education to provide relief to affected schools.
 
This decision is a positive win for cosmetology schools, but it might be too early to know what this decision will mean to non-cosmetology programs. 

The decision to the case was issued in two separate court documents.

Click here to read decision, document # 1

Click here to read decision, document # 2