Commentary, News, Trump Administration

NC joins lawsuit against Betsy DeVos on behalf of student loan borrowers

It comes as no surprise that the the administration of the Prevaricator-in-Chief — a man who for whom ripping off college students was an important business practice prior to becoming president — would be doing his worst to stop those same students from getting out from under debilitating and often predatory loan debt. Last month, Trump’s education secretary, the eminently unqualified Betsy DeVos, took just such action when she put the kibosh on new Obama administration-drafted rules that were designed to, as the New York Times reported, “speed up and expand a system for erasing the federal loan debt of student borrowers who were cheated by colleges that acted fraudulently.”

Now, however, 18 states (including North Carolina) and the District of Columbia are pushing back. This from a story on NPR:

Attorneys General from Massachusetts, New York, and 16 other states filed suit against Education Secretary Betsy DeVos and her department Thursday, accusing DeVos of breaking federal law and giving free rein to for-profit colleges by rescinding the Borrower Defense Rule.

The filing by 18 states and Washington, D.C., asks a U.S. District Court to declare the Education Department’s delay of the rule unlawful and to order the agency to implement it. The states say they have pursued “numerous costly and time-intensive investigations and enforcement actions against proprietary and for-profit schools” that violated consumer protection laws.

The Borrower Defense Rule was adopted by the Obama administration last November and had been set to take effect this month. It was created to make it “simpler for students at colleges found to be fraudulent to get their loans forgiven,” as NPR’s Ed team has reported….

“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” Massachusetts Attorney General Maura Healey said in a news release about Thursday’s court filing. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law. We call on Secretary DeVos and the U.S. Department of Education to restore these rules immediately.”

The Borrower Defense Rule was negotiated after two large for-profit chains — Corinthian Colleges and the ITT Technical Institute — shut down hundreds of campuses following regulatory crackdowns in recent years. The rule would allow borrowers to have their loans forgiven if a state has successfully taken action against a for-profit school. It would also empower the Department of Education to seek money from schools where loans were forgiven.

“For-profit schools receive the vast majority of their revenue from the federal government in the form of federal student loans and grants,” the civil complaint notes. “In 2009, the 15 publicly traded for-profit education companies received 86 percent of their revenues from taxpayer-funded loans.”

The attorneys general who filed the lawsuit are from California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia. (Emphasis supplied.)

“These rules served as critical protections against predatory for-profit schools that exploit hardworking students – students who are simply trying to invest in their own education and future,” said New York Attorney General Schneiderman. He added, “When Washington abdicates its responsibility to protect New Yorkers, we won’t hesitate to step in.”

Good for Attorney General Stein for adding North Carolina to the list. As we have reported previously in this space, for-profit colleges have a terrible record of ripping off vulnerable students in our state and nation — particularly students of color. Let’s hope the lawsuit is just the latest in a long line of defeats for the Trump junta.

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