Healey sues over borrow-defense policy
More than a dozen state attorneys general, led by Bay State AG Maura Healey, are suing the U.S. Department of Education over the sudden and allegedly illegal delay of a rule designed to protect students at for-profit schools from predatory and deceptive institutions.
“Without notice and totally unlawfully and inappropriately, Secretary DeVos announced she was not going to implement the rule,” Healey said in an interview yesterday. “This is a multibillion-dollar industry out there that is raking it in on the backs of students and taxpayers.”
The regulation, called the Borrow Defense Rule, would have banned the use of mandatory arbitration clauses and class-action waivers, which force students to file claims individually and with a private arbitrator. The rule was also meant to make it easier for former students who had been misled by schools about graduation rates and employment prospects to have loans forgiven. The rule was scheduled to go into effect July 1.
But last month, Secretary of Education Betsy DeVos said the Department of Education would delay the rule. The decision to delay an already agreed-to regulation, the AG lawsuit alleges, should have been done with the same process required to amend any regulation, including hearings and public comment.
“She can change the rule, but not without following the law,” Healey said.
In a statement, Department of Education spokeswoman Liz Hill called the suit “ideologically driven.”
“The state attorneys general are saying to regulate first, and ask the legal questions later,” Hill said. “The borrower-defense regulations suffer from substantive and procedural flaws that need to be considered before imposing new burdens.”