18 States And D.C. Sue Betsy DeVos Over For-Profit College Loan Rules

DeVos froze a rule that would help forgive the student debt of people defrauded by for-profit institutions.

Eighteen states and the District of Columbia are suing Education Secretary Betsy DeVos over her decision to suspend a rule that helps student loan borrowers who were defrauded by for-profit colleges.

The lawsuit, filed Thursday in federal district court in Washington, D.C., was led by Massachusetts and joined by 18 other attorneys general. It takes aim at DeVos’ decision to freeze an Obama-era rule known as the “borrower defense to repayment,” which helped forgive student loan debt for people whose for-profit colleges closed amid fraud accusations, leaving students without degrees and with piles of debt.

“Across the US, students and families are drowning in unaffordable student loan debt while predatory, for-profit schools rake it in,” Massachusetts Attorney General Maura Healey tweeted.

The rule was set to take effect July 1, but was halted in mid-June by DeVos’ Education Department, which said the protection was a tax burden with language that was too broad. Some colleges, DeVos said, were concerned they could be unfairly affected.

“Fraud, especially fraud committed by a school, is simply unacceptable,” DeVos said in a statement when she blocked the rule. “Unfortunately, last year’s 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.”

Two groups, Public Citizen and the Project on Predatory Student Lending, also filed a lawsuit over the rule on Thursday on behalf of Meaghan Bauer and Stephano Del Rose, two former students of the for-profit New England Institute of Art in Massachusetts.

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