DeVos Delays Loan Relief For Students Ripped Off By For-Profit Colleges


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

The attorneys general, all Democrats, from 18 states and the District of Columbia accuse the education secretary of breaking federal law and giving private for-profit schools free rein by rescinding the Borrower Defense rule that was to go into effect on the first of this month.

DeVos said last month the Borrower Defense Rule "missed an opportunity to get it right", and her department claimed it intends to "develop fair, effective and improved regulations to protect individual borrowers from fraud, ensure accountability across institutions of higher education and protect taxpayers".

The rules, known as borrower defense, were finalized in October by the Obama administration after years of negotiation and review. A Hillary Clinton administration would nearly certainly have followed through, but Betsy DeVos, Trump's Secretary of Education, has put on the brakes. The Education Department did not immediately respond to a request for comment. It 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 demise of the mega-chain Corinthian Colleges, alone, led to more than 15,000 loan discharges, totaling $247 million. "Secretary DeVos refused and is instead bending over backwards to help for-profit colleges", Chin said.

In addition to Shapiro, the other attorneys general joining the lawsuit include 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. She said in a statement that DeVos had "sided with for-profit school executives against students".

The attorney generals state that DeVos has illegaly delayed these regulations, which should have gone into affect on July 1. The rule prohibits schools that receive federal funds from relying on existing agreements or entering into new contracts with their students that include forced arbitration provisions.

The regulation is widely disliked by for-profits, but it has also been criticized by some other vulnerable colleges, like historically black schools, who say it puts a financial burden on colleges without providing them due process when students allege fraud.

"NEA will continue to push for college affordability by advocating for an increased number of Pell Grants, streamlined federal loan repayment plans to create a single, an income-based option with affordable monthly payments for struggling borrowers, and the restoration of federally subsidized loans for graduate students".

The groups say the students were counting on the borrower defense rule to give them their day in court. They also would have barred schools from requiring students to privately arbitrate claims rather than bring them in federal court. They were crafted following the collapse of several major for-profit college companies, which left some student with no degree and high student-debt. 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.