Democratic attorneys general in 18 states and the District of Columbia have filed a lawsuit against Education Secretary Betsy DeVos, challenging the Trump administration’s delay of Obama-era rules that aimed to protect federal student loan borrowers who were defrauded by for-profit colleges.
Led by Massachusetts Attorney General Maura Healey, the attorneys general filed the lawsuit in federal district court in Washington on Thursday.
The lawsuit argues that DeVos illegally delayed the new rules, called “borrower defense to repayment,” that were finalized by the Obama administration in October and set to take effect July 1.
The rules followed the collapse of Corinthian Colleges, and were the result of two years of negotiation and review by the Obama administration.
DeVos decided to freeze the rule’s implementation in June because of a lawsuit filed in federal court by a California trade association representing for-profit colleges in May.
The association is attempting to block the rules.
DeVos criticized the borrower defense to repayment rules last month, and said that while fraud committed by a school is “simply unacceptable,” the rulemaking effort “missed an opportunity to get it right.”
“The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs,” she said in a statement announcing a new committee to reconsider the rules.
The lawsuit from the 19 attorneys general said the Department of Education’s reasoning for delaying the rules — the pending litigation — is a “mere pretext for repealing the rule and replacing it with a new rule that will remove or dilute student rights and protections.”
“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” Healey said in a statement. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law.”
Healey and other attorneys general filed a motion last month to intervene in the case filed by the California trade association.
The rules from the Obama administration sought to require schools at risk of closing to put up financial collateral, and would have prohibited arbitration agreements, which in the past prevented students from suing schools they felt defrauded them.
