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18 States Sue Education Dept. Over Rollback of Borrower-Defense Rule

Updated (7/6/2017, 4:38 p.m.) with response from the Education Department.

A coalition of states is suing the education secretary, Betsy DeVos, and her department over its decision to roll back an Obama-era regulation aimed at reining in abuses by colleges that defraud students.

The lawsuit was announced by the office of Massachusetts’ attorney general, Maura Healey, which is leading the coalition of 18 states and the District of Columbia in the dispute. The complaint, filed in federal court, argues that the Education Department “violated federal law” by rescinding the borrower defense-to-repayment rule. The rule would provide a simpler path to loan forgiveness for student-loan borrowers who believed they have been defrauded by their colleges.

The department announced on June 14 that it would delay large portions of the rule and would renegotiate it.

“Fraud, especially fraud committed by a school, is simply unacceptable,” Ms. DeVos said in a news release at the time. “Unfortunately, last year’s rule-making effort missed an opportunity to get it right.”

Some college groups applauded the decision to renegotiate the borrower-defense rule, including those representing for-profit and historically black institutions. But advocates for student-loan borrowers viewed the decision as a sign that the Trump administration was backing away from its duty to protect students.

“Since Day 1, Secretary DeVos has sided with for-profit-school executives against students and families drowning in unaffordable student loans,” Ms. Healey said in a news release. “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.”

Elizabeth Hill, a spokeswoman for the department, decried the lawsuit in a written statement on Thursday afternoon. “With this ideologically driven suit, the state attorneys general are saying to regulate first and ask the legal questions later,” Ms. Hill said. She pointed to a lawsuit filed by the California Association of Private Postsecondary Schools, which alleged that the regulations exceeded the department’s authority and would “deny due process” to regulated entities, as a reason for the delay of the rule. “The department cannot simply dismiss these allegations,” she said.

Meanwhile, lawyers for the advocacy groups Public Citizen and the Project on Predatory Student Lending filed a separate complaint to stop the delay of the rule. That lawsuit was filed in federal court in the District of Columbia.

“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, a lawyer for Public Citizen, in a news release.

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