Education Secretary DeVos sued over rule related to for-profit college fraud

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

The Department of Education (ED) changed its rules on how students defrauded by for-profit colleges seek debt relief, leading to lawsuits and a political fight to return the rule to its Obama-era form and a veto from President Trump in support of the change.

Now consumer advocates are suing over related, lesser known Trump administration student debt rule change in another attempt to obtain more relief for defrauded students.

lawsuit filed on Tuesday by Public Citizen and the Project on Predatory Student Lending against the Department of Education (ED) targets the “Partial Relief Rule,” a rule implemented by ED in December 2019.

The plaintiffs argue that DeVos’ new standards “wrongfully denies student loan borrowers who have successfully established a claim through the borrower defense process most of the relief to which they are entitled on their federal student loans.”

The Department of Education did not immediately return a request for comment.

U.S. President Donald Trump (R, background) and Vice President Mike Pence (L) wait to interrupt Education Secretary Betsy DeVos as she speaks to students at a school choice event at the White House in Washington, U.S. May 3, 2017. (Photo: REUTERS/Jonathan Ernst)
U.S. President Donald Trump (R, background) and Vice President Mike Pence (L) wait to interrupt Education Secretary Betsy DeVos as she speaks to students at a school choice event at the White House in Washington, U.S. May 3, 2017. (Photo: REUTERS/Jonathan Ernst)

‘Arbitrary, capricious, and contrary to law’

The new lawsuit is the latest amid the Trump administration’s policies regarding students defrauded by U.S. colleges.

The so-called borrower defense rules were originally written into law through the Higher Education Act in the early 1990s and were meant to help victims of fraudulent schools seek relief. Under existing law, borrowers with federal loans are eligible for loan forgiveness if a college or a university has misled them or engaged in other misconduct in violation of certain state laws.

In 2015, after several for-profit colleges went extinct amid scandals, the Obama administration implemented regulations such that defrauded students who made a successful claim would be granted full debt relief.

Education Secretary Betsy DeVos modified that rule in 2019, and made it tougher to access relief, alleging that the Obama administration left behind a messy set of policies.

Eva Garcia, 25, of La Puente, Ca., graduated from Everest College in 2009 after taking classes in medical billing and coding. In the ensuing years she has struggled to find a job in her field despite assurances of job placement. (PHOTO: by Rick Loomis/Los Angeles Times via Getty Images)
Eva Garcia, 25, of La Puente, Ca., graduated from Everest College in 2009 after taking classes in medical billing and coding. In the ensuing years she has struggled to find a job in her field despite assurances of job placement. (PHOTO: by Rick Loomis/Los Angeles Times via Getty Images)

“When borrower defense arrived in 1995, it … was little used… in the 20 years from 1995 to 2015, fewer than 60 claims were filed,” she said during a previous hearing in front of the House Committee on Education and Labor. “Then the previous administration weaponized the regulation against schools it simply didn’t like. They applied the law in a discriminatory fashion. So since 2015, there has been a 5,000% increase in borrower defense claims.”

This article was originally posted on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Billionaire investor Ray Dalio says ‘you’d be pretty crazy to hold bonds’ right now

‘This period, like the 1930-45 period, is a period in which I think you’d be pretty crazy to hold bonds.’ — Ray Dalio Ray Dalio, the...

Spzrts, a Company Built From Love for Sports & Social Media, by Marko Danial

Sports is about developing relationships, becoming charismatic, and taking various personalities and people to conjoin in one, as a team. Social skills are developed...

Small-business owner says she stayed open by accepting ‘new normal’ amid coronavirus

Forced business closures and a decline of economic activity have wreaked havoc on small companies amid the coronavirus outbreak, causing over 100,000 of them to...

Japan’s yen could offer a win-win for nervy investors: Mike Dolan

With no truly safe bets during a wild year for financial markets, there's now a hunt to cover all eventualities and Japan's yen could...

Oil Futures Drop Below Zero for First Time

 It's been a historic day in the financial markets: Oil futures plunged below zero Monday for the first time as demand for energy collapsed...
Home of Science
Follow me