Rules to help defrauded students clear loans being revised


Sen. Warren, Other Democrats Protest Student Loan Changes

But Education Secretary Betsy DeVos said in a statement Wednesday those regulations were "overly burdensome and confusing" and need to be streamlined.

The Education Department says it will change two Obama-era rules governing student loan forgiveness in cases involving fraud and misconduct by universities.

Several lawmakers and observers saw the department's withdrawal of the borrower-defense rule as unfairly tipping the scales in favor of for-profit colleges. DeVos, that deadline has been put on hold.

Concerned that the US Education Department under Secretary Betsy DeVos will fall short in its defense of these consumer protection rules, Healey and attorneys general from states including California, Iowa, Oregon, Illinois, and NY have filed a motion to intervene in a case before the US District Court for the District of Columbia.

What exactly would a federal school voucher program look like, and would it fund schools that discriminate against students based on their gender, religion, race or sexual orientation?

CAPPS argued that the rules would likely "shutter many vocational schools without any reasonable justification and will needlessly leave many non-traditional students with few or no educational options".

The for-profit college industry did indeed lobby relentlessly in an unsuccessful effort to block the borrower defense rule, and they continue to fight to overturn the rule. The Secretary of Education's decision to delay and renegotiate the Borrower Defense and Gainful Employment regulations is a direct attack on federal student loan borrowers-especially the most vulnerable students in our higher education system: low-income students and students of color.

To that end, the AGs claim in the motion to intervene that DeVos and CAPPS aren't going to be looking out for students when considering the regulations.

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"Are Trump and DeVos waging a war on teachers?" asks the Center for American Progress (CAP).

"The Secretary's suggestion that the Department is now "studying" the already finalized regulation at issue in this case calls into question the Department's ability to represent the State Movants' interests in this matter", the lawsuit states.

Due to pending litigation challenging the BDR regulations, the Department is postponing the effective date pursuant to section 705 of the Administration Procedures Act.

Today's motion to intervene was actually filed before Secretary DeVos announced her intention to redo the Borrower Defense rule.

Press Release Made Available by the Office of Attorney General Eric T. Schneiderman. DeVos's announcement, but have not yet received a response.

"Students shouldn't have the pause button hit on their consumer protections, and this isn't the time for the Department of Education to step back from their responsibility to protect federal loan borrowers".

Last month, a number of those same state officials called on DeVos to stop delaying loan forgiveness. Almost 4,500 American Career Institute students in MA have qualified for federal loan forgiveness of $30 million of debt. Many students were caught with student loans they had taken out to pay for Corinthian tuition.

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