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lakeelmoleader.com November 20, 2017


States sue DeVos for delaying student loan protections

07 July 2017, 12:56 | Kara Nash

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Education Secretary Betsy DeVos should not delay fraud protections for student loan borrowers, a lawsuit filed Thursday against the Department of Education by 18 states and the District of Columbia argues.

Massachusetts Attorney General Maura Healey, who is leading the suit, said in a statement that DeVos had "sided with for-profit school executives against students".

The lawsuit was filed Thursday in federal court in Washington and demands implementation of borrower defense to repayment rules. The rule was finalized by the Obama administration in November 2016 after almost two years of negotiations, following the collapse of Corinthian Colleges, a national for-profit chain.

The so-called Borrower Defense Rule, completed by the Obama administration after years of work, entitled student loan borrowers to pursue loan forgiveness from schools found to have defrauded them. During her few months in office, DeVos has rolled back Obama-era efforts to require loan firms to help student debtors manage or discharge their loans rather than maximize the amount they pay; reversed another provision that limited loan companies from charging certain fees; and delayed rules meant to deter college misconduct and cut off federal money to colleges that bury students under unaffordable debt.

A spokeswoman for DeVos told media the secretary would not immediately comment.

The rule would have clarified the federal loan forgiveness process for students who were defrauded or misled by their colleges.

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In enacting the borrower defense rule past year, the Obama administration reviewed over 10,000 comments from students, school officials and consumer advocates, and gave schools more than six months to prepare for the implementation. "The result is a muddled process that's unfair to students and schools, and puts taxpayers on the hook for significant costs".

The worst-performing programs cited by the Department of Education - those that consistently leave their graduates with more debt than they can repay - are required to show evidence of improvement or lose eligibility for federal funding. This is important because these clauses prevent students from suing the school in court and from joining their complaints together in class actions. Bernie Sanders of Vermont, sent a letter to DeVos opposing the delay, saying the department had never used litigation as a reason to delay rules.

Implementation of the rules, known as "borrower defense", was delayed in May by the Trump administration.

"Secretary Betsy DeVos has effectively revoked students' rights under the rule while giving a pass to predatory schools that wield influence with this administration", Julie Murray, a Public Citizen attorney representing the plaintiffs, said in a statement.

Becerra and seven other state attorneys general, along with the District of Columbia, filed a motion to intervene in that suit, saying they wanted to make sure the regulations were adequately defended. The regulation would have cut off federal funding to career programs that consistently left students with more debt than they could afford.



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