DeVos seeks second delay of college loan changes
Rule is last resort for students of defunct for-profit schools
Education Secretary Betsy DeVos is proposing another delay of an Obama-era overhaul of rules to erase the federal student debt of borrowers defrauded by colleges.
Ina Federal Register notice published Tuesday, the U.S. Department of Education invited public comment on a plan that would give the agency until July 1, 2019, to implement updates to a regulation known as borrower defense to repayment.
The rule, which dates to the 1990s, wipes away federal loans for students whose colleges used illegal or deceptive tactics to get them to borrow money to attend.
The Obama administration revised the regulation last year to simplify the claims process and shift more of the cost of discharging loans onto schools.
Those changes were slated to take effect July.
“This is another illegal delay by Secretary DeVos to allow predatory for-profit colleges to cheat students and taxpayers,” said Massachusetts Attorney General Maura Healey, a Democrat, who is leading 19 state attorneys general in suing DeVos over the delays to the borrower defense rule.
The Trump administration argues that the additional delay is necessary to comply with a statute that says any regulatory change that has been finalized on or before Nov. 1 must take effect the following July, the start of the new financial aid award year.
“Given that the first negotiated rulemaking session is scheduled for November 13-15, 2017, we cannot complete the negotiated rulemaking process and the development of revised regulations by November 1, 2018,” the department wrote in Tuesday’s notice. “The regulations resulting from negotiated rulemaking could not be effective before July 1, 2019.”
Borrower defense has become a last resort for many former students of defunct for-profit schools ITT Tech and Corinthian Colleges.
Both schools spent their last few years clouded by allegations of fraud, deceptive marketing and steering students into predatory loans.
Their students had hoped the evidence in the state and federal cases against the schools would create a clear path for loan discharge, but for the most part it has not.
Revisions to the borrower defense rule was supposed to simplify and speed up the claims process, but DeVos said the Obama administration created “a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs.”