Education

States Sue DeVos Over Suspension Of Student Loan Protections

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Rob Shimshock Education Reporter
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Washington, D.C., in conjunction with 18 states, filed a lawsuit Thursday against Education Secretary Betsy DeVos regarding the secretary’s suspension of student loan protections.

The involved attorney generals are suing DeVos over the secretary’s mid-June freezing of student recovery of federal loan debt at colleges that committed fraud, according to The New York Times. DeVos pledged to rewrite the rules, calling them “a muddled process that’s unfair to students and schools,” according to KCCI.

The rules would have made it easier for students to sue schools for fraud and compel schools risking closure to provide financial collateral instead of letting taxpayers foot potential bills, The New York Times reported.

“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” said Massachusetts Attorney General Maura Healey. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law.”

Two student borrowers also sued the Department of Education Thursday because of the suspended implementation of the rules. The parent company of the school they attended, the New England Institute of Art, settled to pay $95 million after being accused of illegally compensating recruiters.

“Fraud, especially fraud committed by a school, is simply unacceptable,” DeVos said in a June statement. “Unfortunately, last year’s rule-making 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.”

Liz Hill, press secretary for the Department of Education, addressed the lawsuit in a Thursday afternoon press release.

“With this ideologically driven suit, the state attorneys general are saying to regulate first, and ask the legal questions later—which also seems to be the approach of the prior administration that  adopted borrower-defense regulations through a heavily politicized process and failed to account for the interests of all stakeholders,” said Hill.

The press secretary proceeded to explain that the California Association of Private Postsecondary Schools sued the Department of Education in May, alleging that the department’s borrower-defense regulations surpassed its legal purview, breached the Federal Arbitration Act, and did not uphold due process.

“The borrower-defense regulations suffer from substantive and procedural flaws that need to be considered before imposing new burdens on regulated parties that will come at a cost to taxpayers of $14.9 billion in the next ten years,” continued Hill, explaining that a desire to see the lawsuit through and ensure that the rules helped students accounted for the department’s pause.

The Daily Caller News Foundation reached out to Healey for comment, but received none in time for publication.

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