18 states sue DeVos over for-profit college regulation delay

Susan Walsh  AP

DeVos plans to hold two public hearings this month on the rules and said her aim is "to protect students from predatory practices while also providing clear, fair and balanced rules for colleges and universities to follow".

The first lawsuit [PDF] was filed by Public Citizen on behalf of two former students at the New England Institute of Art (NEIA) who owe a total of more than $80,000 in federal student loans and interest.

The suit also criticized DeVos for saying a reason for the delay was a pending legal challenge to the regulations by the California Association of Private Postsecondary Schools.

A final version of the rules was announced last fall after almost two years of negotiations. They argue that the Education Department can not stop enforcing existing regulations that don't align with their philosophy without due process.

Students at for-profit colleges accounted for about one-third of defaults - even though they make up a small percentage of all post-secondary schools in the country - in the three-year period starting in 2013, according to the Department of Education.

The lawsuit was filed Thursday, July 6, 2017, in federal court in Washington and demands implementation of borrower defense to repayment rules.

"For-profit schools typically advertise themselves to students with modest financial resources who are eligible for federal funds in the form of grants and loans", the suit said.

MA is the lead plaintiff in the lawsuit filed in US District Court in Washington, DC Thursday.




"Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans", said Maura Healey, the MA attorney general, who led the multistate coalition. In April of this year, Rep. Aguilar sent a letter to Secretary DeVos with members of the Inland Empire congressional delegation regarding the closure of Westech College, urging Secretary DeVos to expedite procedures for borrowers to be discharged of federal student loan debt.

The suit (PDF) claims the Education Department delay effectively rescinded a final agency regulation that made it easier for students to erase federal student debt when their schools misled them in recruitment and marketing efforts. But in a June statement, DeVos said her department would pause the regulations in order to "take a step back and make sure these rules achieve their goal: helping harmed students".

Leading the suit against DeVos is MA attorney general Maura Healy.

Prohibiting schools participating in the Direct Loan Program from using mandatory pre-dispute arbitration agreements or class action waivers to resolve claims with students.

The rules were originally created to hold higher education institutions accountable for cheating students and taxpayers out of billions of dollars in federal loans.

Led by MA, the lawsuit was filed in Federal District Court in Washington, D.C. against DeVos and the Department of Education on Thursday.

On June 14, just a month after Secretary DeVos took the rule in for re-evaluation, her office announced that it would put most of it on ice and issue a replacement regulation. The rules allowed borrowers to seek loan forgiveness if their schools had deceived them or committed fraud.

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