Eighteen States, Harvard Law School, and Nonprofit Sue Ed Department over Student Loan Relief
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Eighteen States, Harvard Law School, and Nonprofit Sue Ed Department over Student Loan Relief

North Carolina among states suing Ed Department, Secretary DeVos for abandoning student protections

July 6, 2017

The U.S. Department of Education (DOE) and Secretary of Education Betsy DeVos are being sued by eighteen states, Harvard Law School's Project on Predatory Student Lending, and nonprofit Public Citizen due to the delay in suspending debt relief rules for students defrauded by for-profit colleges.

The Delay

According to the North Carolina Department of Justice (NCDOJ), the rules were scheduled to go into effect on July 1 of this year. But, as Reuters reports, Secretary DeVos decided to delay implementation of the rules, claiming that they need to be reset.

"The delayed rules are deeply troubling," said North Carolina Attorney General Josh Stein. "Students who borrow money for their education are taking a risk to improve their lives – and they must be protected from those who take advantage of vulnerable student borrowers. Delaying these rules that protect students is irresponsible and reckless."

The NCDOJ alleges that the DOE postponed putting the protections into effect without using the notice and public comment process that federal law requires.

The Second Suit

In a separate lawsuit, Public Citizen and the Project on Predatory Student Lending allege that the for-profit New England Institute of Art took unfair and deceptive actions against several students that resulted in a useless education, few job opportunities, and large debt. The groups are representing two of the affected students, who have also asserted their right under federal law to have the DOE cancel the loans that they took out to attend the Institute.

"Secretary Betsy DeVos has effectively revoked students' rights under the rule while giving a pass to predatory schools that wield influence with this administration," said Julie Murray, a Public Citizen attorney who represents the plaintiffs. "We are asking the court to order this administration to implement the rule now, as the law requires."

"Delaying the Borrower Defense rule will leave hundreds of thousands of borrowers like Bauer and Del Rose with a right to have their federal loans cancelled but little clarity about how the Education Department must carry out that process," said Toby Merrill, who directs the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School. "Not only does the department want to pull back the process it has committed to, but it also is capitulating to companies that want to keep borrowers from enforcing their rights in court."