Democratic attorneys general from 18 states and Washington D.C. have filed a lawsuit against the Department of Education and Education Secretary Betsy DeVos after the secretary froze borrower defense rules last month.
The lawsuit was filed on Thursday, July 6, and challenges DeVos’ decision to pause the borrower defense rules, which had been finalized by the Obama administration.
The borrower defense rules were formulated to help erase the federal student loan debt of student debtors who were defrauded by unethical institutions. For example, LendEDU recently covered the story of the Corinthian Colleges, the now defunct for-profit college chain that was misrepresenting employment success amongst their graduates.
Students who attended the Corinthian Colleges were left unemployed and with enormous debt. In May, the New York attorney general began notifying the 3,000 New York residents that attended the college chain that their federal student loan debts may be forgiven.
The borrower defense rules crafted by the Obama administration were scheduled to take effect July 1, 2017. Citing a federal lawsuit brought on in May by an association of for-profit colleges in California, Secretary DeVos has since changed those plans.
In a statement released by the Department of Education, Secretary DeVos criticized the borrower defense rules. “Fraud, especially fraud committed by a school, is simply unacceptable. Unfortunately, last year’s rulemaking effort missed an opportunity to get it right. The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs. It’s time to take a step back and make sure these rules achieve their purpose: helping harmed students.”
In the lawsuit filed in the Federal District Court in Washington D.C., the attorneys general from the 18 states lamented the Department of Education’s reasoning for the delay being the California lawsuit. The lawsuit went on to call the Education Department’s delay a “mere pretext” for the eventual repeal and subsequent replacing of the borrower defense rules that were already finalized.
The desire of the suing states is to have the rules restored.
Maura Healey, the Massachusetts Attorney General who spearheaded the multi-state lawsuit against DeVos and her department, said the following in a press release, “Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans. Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law. We call on Secretary DeVos and the U.S. Department of Education to restore these rules immediately.”
The Department of Education has yet comment on the lawsuit, and the Department’s lawyers are still examining the suit.
LendEDU has covered the situation surrounding the borrower defense rules and the fraudulent colleges and universities that are responsible for this mess extensively. In addition to covering the case surrounding the Corinthian Colleges, LendEDU has also wrote about previous instances where various attorneys general have urged DeVos to keep the Obama era rules intact.
Back in February, Illinois Attorney General Lisa Madigan and several other attorneys general wrote an open letter to Secretary Betsy DeVos urging her to keep several protections in place that were designed to stop predatory practices conducted by for-profit schools.
Author: Dave Rathmanner
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