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18 States File Suit Over For-Profit College Lenders


State attorneys in 18 states and the District of Columbia have filed lawsuits against Secretary of Education Betsy DeVos over a rule that protected students from misconduct of loan lenders.

The lawsuit alleges an "unlawful rescission" of the Borrower Defense Rule. The rule, established last November, allows students to apply for loan forgiveness and avoid debt from for-profit colleges that were found to be fraudulent.

"By delaying the Rule, the Department effectively canceled a duly promulgated regulation without soliciting, receiving, or responding to any comment from any stakeholder or member of the public, and without engaging in a public deliberative process," the complaint argued.

According to the Associated Press, over 16,000 defense claims are now being processed by the department. Thousands more students had applied for debt forgiveness since the rule was first proposed in November and many still await decisions to have claims approved and debt forgiven.

The rule was first proposed after two for-profit institutions -- ITT Technical Institute and Corinthian Colleges -- had actions taken against them for failing to meet certain regulatory checks by the state. This included giving false information to students about the value of their degrees and putting "rip-off" clauses into student enrollment agreements that barred them from challenging any illegal conduct by the school. Trump University is not currently one of the for-profit colleges eligible for loan relief.

Two non-profit organizations also filed suits on July 6. They allege that the delay should be lifted because failing to implement the rule is in violation of certain consumer protection laws.





The Borrower Defense Rule was finalized during the last days of the Obama administration and was set to take effect July 1. However, the Education Department delayed the process by saying it needed to review another lawsuit brought by a for-profit college trade association. By not bringing this delay to the attention of the public, the suit says that DeVos and the department were in violation of federal law.

"These rules served as critical protections against predatory for-profit schools that exploit hardworking students who are simply trying to invest in their own education and future," New York Attorney General Schneiderman said.

A copy of the lawsuit can be viewed here.

Some students have been speaking out on Twitter in regards to the recent lawsuit. Others have been using the hashtag #DearBetsy to address their concerns with how DeVos has addressed topics like Title IX in universities.



"I'm happy to see my state is on the list of those suing DeVos & Comp," another user added.

DeVos has said that the Rule needs to be reviewed and potentially rewritten as reasoning for the delay. She also said that the Borrower Defense Rule was a "muddled process that's unfair to students and schools, and puts taxpayers on the hook for significant costs."

Senator Elizabeth Warren from Massachusetts also commented on the lawsuit via

Twitter Embed Tweet or Video">twitter
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"Betsy DeVos might not like it, but her job is to serve students," she said. "And if she won't do it, we will force her to do so."
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