States Are Suing Betsy DeVos Over Delayed Student Loan Protections

Betsy De Vos Sued By 18 States Over For Profit College Full Story

"Her decision to cancel vital protections for students and taxpayers is a betrayal of her office's responsibility", Healey said.

State attorneys from the District of Columbia and 18 states are suing Education Secretary Betsy DeVos for freezing the roll out of a regulation created to ease the federal student loan debt of those who were defrauded by for-profit colleges.

President Obama's administration updated an existing law with the "borrower defense rule". But despite the extensive and proper effort put into crafting the rule, the Trump Administration has unilaterally and illegally suspended its implementation.

Later in 2015, the U.S. Department of Education fined Corinthian $30 million for its Heal College system inflating official placement rates by paying temporary employment agencies to hire its graduates on a short-term basis.

The rule was created after almost two years of negotiations, following the collapse of Corinthian Colleges, a national for-profit chain which enrolled thousands of North Carolina students, Stein pointed out. The state of California won a judgment of more than $1 billion against Corinthian past year for misleading students in its advertising.

The suit was filed by the Attorneys General of Pennsylvania, Massachusetts, California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Rhode Island, Washington, Vermont, Virginia and the District of Columbia. For-profit schools receive the vast majority of their revenue from federal student loans and grants, the lawsuit said.

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Attorneys general for 18 states and Washington, D.C., have filed a federal lawsuit against Education Secretary Betsy DeVos for delaying new rules created to help protect student borrowers who are defrauded by colleges.

The rule would have have required schools at risk of closing to put up financial collateral.

Led by MA, the lawsuit was filed in Federal District Court in Washington, D.C. against DeVos and the Department of Education on Thursday.

The lawsuit says the Department of Education broke federal rules by pausing the change too quickly and not taking public input or giving enough justification for the pause. "Fraud, especially fraud committed by a school, is simply unacceptable". In June, DeVos announced the department was putting a hold on the regulations as a "regulatory reset" and would hold public hearings on the policies. This led students from these colleges and other schools like ITT Tech to approach the Department of Education "with claims for debt relief relying on a seldom-used provision of the Higher Education Act that makes federal student loans unenforceable when a college engages in misconduct".

Prohibiting schools participating in the Direct Loan Program from using mandatory pre-dispute arbitration agreements or class action waivers to resolve claims with students.

The regulations at issue provide protections for federal student loan borrowers against abusive practices by schools and colleges, including for-profit companies and assist in enforcing state consumer protection laws. Data released by the Obama administration in January found that more than 800 programs across the country were failing to meet the rule's standards.

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