The attorneys general from 18 states and Washington, D.C. have filed a lawsuit against Education Secretary Betsy DeVos over her decision to freeze Obama-era rules designed to protect students from abuse by for-profit colleges.
The rules, known as borrower defense, were finalized by the Obama administration in October 2016 and had been scheduled to take effect on July 1. They sought to make it easier for defrauded student loan borrowers to seek debt forgiveness. The rules also prohibit colleges from forcing students to resolve complaints against their schools through arbitration rather than in court.
In a statement, DeVos said the rules would be delayed and rewritten because they created "a muddled process that's unfair to students and schools." When she announced the delay, DeVos claimed she was trying to provide “clear, fair and balanced rules.”
“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.”
According to the complaint, which was filed in U.S. District Court on Thursday, the Education Department is violating federal law by halting updates to what's known as "the borrower defense to repayment."
The rule was put in place in the 1990s and erases federal loans for students whose colleges used illegal and/or deceptive tactics to get them to borrow money. The Obama administration updated it last year in order to simplify the claims process and move the cost of discharging loans onto the schools.
“Betsy DeVos is bending over backwards to make it easier for fly-by-night schools to cheat students and bury them in mountains of debt,” Senator Elizabeth Warren said in a statement Thursday. “Secretary DeVos might not like it, but her job is to serve students — and we will make sure she does.”