State sues U.S. over relief of student debt
More than 50,000 federal loan claims by Corinthian attendees remain unresolved.
The federal Department of Education is refusing to process debt-relief claims from tens of thousands of students who had federal loans to attend Corinthian Colleges schools, California’s attorney general said Thursday in the latest lawsuit against the Trump administration.
More than 50,000 relief claims are pending since the for-profit college collapsed, including 13,000 from Californians, according to the lawsuit Atty. Gen. Xavier Becerra filed in federal court in San Francisco. Attorneys general in Illinois, Massachusetts and New York are filing a separate similar lawsuit.
California’s lawsuit, which also names Education Secretary Betsy DeVos, is the latest in a series by states challenging Trump administration policies on a variety of issues, including immigration and the environment.
The lawsuit says students are eligible for relief after courts ruled that Corinthian — which operated schools under its Everest, Heald and WyoTech brands before collapsing in 2015 — defrauded them in violation of California’s consumer protection laws.
U.S. Department of Education spokesman Jim Bradshaw said he could not comment.
This week, Education Department officials began negotiating to change federal rules meant to protect students from fraud by colleges and universities.
A 1994 rule allowed loans to be forgiven if a college deceived students, but it was rarely used until the end of the Corinthian and ITT Tech for-profit chains. The Obama administration revised the rule in 2016 to add more protections for students, but DeVos froze those revisions until new rules can be written.
Becerra previously sued U.S. education officials, claiming there were illegal delays in regulations to protect students against misconduct by for-profit schools.
Becerra called the federal delays “unconscionable.”
He noted in a teleconference with reporters Thursday that the latest lawsuit was filed the same day President Trump touted his administration’s efforts to roll back federal regulations. Federal rules can be helpful on many levels, Becerra said, saying Trump should instead tell DeVos to “to get off the couch and do something to protect these students.”
Massachusetts Atty. Gen. Maura Healey said education officials are worsening the problem by garnishing wages and seizing tax refunds from students who qualify for debt relief.
Before DeVos froze the revisions, the department had granted relief to 28,000 students whose claims were similar to those that now are pending, Becerra said.