18 States Sue Education Dept. to Restore Borrower Defense Rule

Democratic attorneys general from 18 states and the District of Columbia on Thursday filed suit against the U.S. Education Department and Secretary Betsy DeVos, challenging the agency's move to delay the borrower defense rule, The New York Times reported.

The regulation, finalized in October by the Obama administration, sought to protect and offer compensation to student borrowers who were cheated by colleges that acted fraudulently. It had been scheduled to take effect on July 1, but the Trump administration hit pause on the new rule last month, citing a federal lawsuit filed in May by an association of for-profit colleges in California that is seeking to block the regulation.

Secretary DeVos also criticized the rule, stating that fraud is unacceptable but that previous rulemaking efforts missed an opportunity to get the regulation right. "The result is a muddled process that's unfair to students and schools and puts taxpayers on the hook for significant costs," she said. The department announced plans to establish a new rulemaking process to reconsider the matter.

The state attorneys general's lawsuit called the department's rationale for the delay—the California lawsuit—a "mere pretext" for repealing and replacing rules that had already been finalized. The states are seeking to have the rule restored.

The attorneys general who filed the lawsuit are from California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.

"Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans," said Maura Healey, the Massachusetts attorney general, who led the multistate coalition. "Her decision to cancel vital protections for students and taxpayers is a betrayal of her office's responsibility and a violation of federal law."

 

Related Links

Massachusetts Attorney General Maura Healey’s Press Release

http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-07-06-ag-healey-sues-education-secretary-betsy-devos.html

The New York Times

https://www.nytimes.com/2017/07/06/business/dealbook/massachusetts-betsy-devos-lawsuit.html