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.
A 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.
‘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.
“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/.
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