Attorneys General to DeVos: Delaying Student Loan Protections Is 'Injustice for Students'

"Yet again and again, Secretary DeVos and the Trump administration put unscrupulous special interests before students," New York AG Eric Schneiderman said.

Education Secretary Betsy DeVos / REUTERS

A group of 21 attorneys general signed an open letter to Education Secretary Betsy DeVos urging her to reinstate protections for students scammed by for-profit colleges.

The letter cites the Borrower Defense Rule and the Gainful Employment Rule. These guidelines were intended to protect students who were defrauded by higher education institutions. Last year the Obama administration clarified the rules and simplified the claims process for those affected by predatory schools. The rules were scheduled to go into effect July 1 until the current administration stepped in.

"The Department cannot point to any new facts or compelling reasons for a new rulemaking," the attorneys general state. "We are dismayed by the Department's decision to cast aside all the hard work and progress achieved during its previous rulemaking, and disheartened that the Department has decided to turn its back on the critical protections it promised to borrowers."

Some of the schools in question have, for instance, exaggerated their post-graduation job rates to entice students to attend their schools — often for high prices. Corinthian Colleges was one such school that was accused of misleading its students with false advertising and unrealistic expectations given to potential students. Corinthian closed all of its schools in 2015.

ITT Technical Institute, which existed for almost half a century, was a for-profit tech school that closed its doors in 2016. In 2014 Time ranked ITT as number two among colleges "that leave the most students crippled by debt." In 2011, 22 percent of its borrowers had defaulted on federal loans.

DeVos has previously criticized the Obama administration's regulations. In a statement announcing the delay she called the previous efforts "a muddled process that's unfair to students and schools, and puts taxpayers on the hook for significant costs."

"It's time for a regulatory reset," she said.

But the attorneys general argued that last year's regulations were the result of "robust and thorough negotiated rulemaking."

"This is both a waste of resources and a betrayal of students," they wrote.

"These rules are meant to protect students in New York and across the country from predatory for-profit schools. Yet again and again, Secretary DeVos and the Trump administration put unscrupulous special interests before students," said New York Attorney General Eric Schneiderman in a statement. "Attorneys General won't hesitate to step in and fight back when the federal government fails to protect those they serve."

The letter also follows a lawsuit filed last week by 19 attorneys general against DeVos and the department. Eighteen states and the District of Columbia all signed on the suit. (Maine Attorney General Janet Mills announced on July 13 that she plans to sign on as well and didn't initially due to the state's government shutdown at the time the suit was filed.)

The attorneys general for California, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, all Democrats, signed the suit.

Massachusetts led the lawsuit. "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 statement.

The Education Department cited pending litigation against DeVos and the department as one reason it was postponing the rules. The California Association of Private Postsecondary Schools filed a lawsuit against the department in May, calling the rules unconstitutional and saying they "exceed the Department's statutory jurisdiction and authority."

However, the attorneys general said the department and DeVos were using the pending litigation as "a mere pretext" to repeal the rules and replace them with one that "will remove or dilute student rights and protections," Reuters previously reported.

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