DeVos Loses Court Case Concerning the Delay of Student Loan Protections

Hannah Astin
Staff Writer

News_Hannah_DeVos_Besty DeVos, Wikimedia Commons

PC: Wikimedia Commons

A federal judge ruled on Sept. 12 that Betsy DeVos’ delay of the Borrower Defense Rule was unlawful.

The ruling was in response to a July 2017 lawsuit against Education Secretary Betsy DeVos and the Department of Education. The lawsuit was filed by the Attorney General’s of 18 states, as well as the District of Columbia.

The lawsuit accused DeVos of breaking a federal law, by rescinding the Borrower Defense Rule, a rule used by students seeking student loan forgiveness from fraudulent institutions.

The Borrower Defense Rule was previously adopted by the Obama administration, after Corinthian Colleges and the ITT Technical Institute, two large for-profit institutions, closed hundreds of campuses after recent regulatory crackdowns.

The rule allowed borrowers to have their loans forgiven if a state successfully acted against a for-profit school. The rule was implemented in the 1990’s, but remained vague until the Obama administration clarified exactly how students should seek loan relief.

“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 Eric Schneiderman in an interview with NPR.

The Education Department delayed the rule in June 2017, attempting to restart the rule-making clock, and rewrite the rule to make it harder for students to get student loan debt relief. The Education Department posited that some students should only get some of their loans forgiven, depending on their current income. The new rule by DeVos would take effect in mid-2019.

“Since Day 1, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” said Massachusetts Attorney General Maura Healey said in a 2017 news release about the court filings.

“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.”

A federal judge ruled on Sept. 12 that Education Secretary DeVos’ delay of this student borrower protection rule was “unlawful” and “arbitrary and capricious,” as stated in the ruling. United States District Court Judge Randolph Moss sided with two former students seeking loan forgiveness and the attorneys general from the 18 states filing against the Trump Administration.

“This is such an important win for student borrowers and anyone who cares about a government that operates under the rule of law,” said Toby Merrill, of Harvard Law School’s Project On Predatory Student Lending, according to NPR.

Judge Moss said in his ruling that the department’s actions deprived the students “of several concrete benefits that they would have otherwise accrued under the Borrower Defense Regulations.”

Judge Moss also allowed the two plaintiffs, Meaghan Bauer and Stephano Del Rose, to join a separate case as defendants against a for-profit college industry suing to block the Obama-era Borrower Defense rule.

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