Arkansas Democrat-Gazette

18 AGs sue DeVos, cite rules freeze

- Informatio­n for this article was contribute­d by Collin Binkley of The Associated Press and by Danielle Douglas-Gabriel of The Washington Post.

Democratic attorneys general from 18 states and the District of Columbia sued U.S. Education Secretary Betsy DeVos on Thursday over her decision to suspend rules that were meant to protect students from abuse by for-profit colleges.

The lawsuit, filed in federal court in Washington, says DeVos violated rule-making laws when she announced a June 14 decision to delay so-called borrower defense to repayment rules. The rules, which date from the 1990s, wipe away federal loans for students whose colleges used illegal or deceptive tactics to get them to borrow money to attend.

President Barack Obama’s administra­tion

revised the rules last year to simplify the claims process and shift more of the cost of dischargin­g loans onto schools. The revised rules were scheduled to take effect Saturday.

DeVos, in her announceme­nt saying the rules would be delayed and rewritten, said they created “a muddled process that’s unfair to students and schools.”

Education Department spokesman Elizabeth Hill called the lawsuit by attorneys generals “ideologica­lly driven” and said the now-delayed rules suffered from “substantiv­e and procedural flaws” that need to be addressed.

“That is why the Secretary decided it was time to take a step back and hit pause on these regulation­s until this case has been decided in court and to make sure these rules achieve their purpose: helping harmed students,” Hill said in a statement.

But consumer advocates and liberal lawmakers say the Obama-era changes achieve exactly that by speeding up loan discharges and having colleges foot more of the bill.

To limit financial risk to taxpayers, the new rules were to expand the conditions under which colleges have to get a letter of credit from a bank assuring the availabili­ty of at least 10 percent of the total amount of federal financial aid funds it receives. Among the circumstan­ces that would trigger a letter are lawsuits filed by federal agencies, defaults on debt obligation­s and enforcemen­t action taken by an accreditat­ion agency.

“For almost two years, we worked with other state [attorneys general], schools, lenders, the department, a variety of stakeholde­rs to come up with a rule that would protect students and ensure that schools and taxpayers would be treated fairly,” said Massachuse­tts Attorney General Maura Healey, who is leading the lawsuit against DeVos.

The rules also would have forbidden schools from forcing students to sign agreements that waive their right to sue. Defrauded students would have faced a quicker path to get their loans erased, and schools, not taxpayers, could have been held responsibl­e for the costs.

A final version of the rules was announced last fall after nearly two years of negotiatio­ns. The Obama administra­tion started pursuing new rules after the Corinthian Colleges chain shut down in 2015 after allegation­s of misconduct, leading to a flood of applicatio­ns from students seeking to get their loans forgiven.

Healey said the regulation was a “common-sense measure” meant to protect students.

“Since day one of [President Donald Trump’s] administra­tion, Secretary of Education Betsy DeVos and the administra­tion have sided with for-profit schools over students,” Healey told reporters. “For me and my colleagues, it’s simple: When students and families are cheated out of an education and taxpayers foot the bill, everybody loses.”

Healey added: “It’s important that students have their day in court. All aspects of this rule are important and I’m concerned about any action to undermine or strip any of what’s in the borrower rule.”

AGENCY CITES LAWSUIT

The lawsuit says DeVos and the Education Department failed to take legally required steps to delay already establishe­d rules. It says they failed to open the decision to public comment and failed to provide an adequate legal justificat­ion for delaying the rules, among other faults.

In June, the Education Department said it was delaying the rule because a federal court was weighing a lawsuit filed by a California trade group made up mostly of for-profit colleges seeking to block the rules. The department cited a law allowing such a delay for litigation if it is determined “that justice so requires.”

The attorneys general said that justificat­ion is “a mere pretext” for repealing and replacing the regulation.

The other states that joined the lawsuit are California, Connecticu­t, Delaware, Hawaii, Iowa, Illinois, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvan­ia, Rhode Island, Vermont, Virginia and Washington.

Last week, a group of 47 Democrats in Congress, along with independen­t Sen. Bernie Sanders of Vermont, sent a letter to DeVos opposing the delay, saying the department had never used litigation as a reason to delay rules.

A separate lawsuit against the Education Department was filed Thursday on behalf of two former students of a Boston-area for-profit college. The suit says the students were counting on protection­s in the new rules to sue the New England Institute of Art, which they say deceived them and left them with few job prospects and heavy debt. The school’s parent company did not immediatel­y comment.

“Secretary Betsy DeVos has effectivel­y revoked students’ rights under the rule while giving a pass to predatory schools that wield influence with this administra­tion,” said Julie Murray, an attorney for Public Citizen, a liberal think tank in Washington that’s representi­ng the students.

The lawsuits set up a legal battle that has been brewing outside the courts for months. Advocacy groups and some congressio­nal Democrats have been gearing up for a fight to preserve Obama-era rules that were intended to hold for-profit colleges accountabl­e, while the Trump administra­tion has sought to roll back regulation­s it sees as burdensome.

“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,” Sen. Elizabeth Warren, D-Mass., 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.”

Last Friday, DeVos said she also was suspending the new “gainful employment” rule, another hallmark of the Obama administra­tion that was set to take effect in July. The regulation would have cut off federal funding to career programs that consistent­ly left students with more debt than they could afford. Data released by the Obama administra­tion in January found that more than 800 programs across the country were failing to meet the rule’s standards.

Trump, who nominated DeVos, ran into trouble with his own for-profit Trump University. The now-closed school agreed in March to pay $25 million to settle a class-action lawsuit that affected about 3,700 former students.

 ?? AP/SUSAN WALSH ?? Education Secretary Betsy DeVos testifies on Capitol Hill last month. DeVos’ decision to suspend rules meant to protect students from abuses by for-profit colleges drew a lawsuit Thursday.
AP/SUSAN WALSH Education Secretary Betsy DeVos testifies on Capitol Hill last month. DeVos’ decision to suspend rules meant to protect students from abuses by for-profit colleges drew a lawsuit Thursday.

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