Lawsuit seeks to force Betsy DeVos to cancel defrauded students’ loans

Betsy DeVos, U.S. Secretary of Education. File photo: Wikipedia Commons/Gage Skidmore

Nov. 14 (UPI) — A California-based non-profit filed a lawsuit against Education Secretary Betsy DeVos for failing to cancel student loans for borrowers whose schools closed before they could earn degrees.

The suit filed by the Housing and Economic Rights Advocates on Tuesday states the Department of Education has continued to collect loans that should be dismissed under an Obama administration regulation, known as the Borrower Defense to Repayment rule.

“Under current leadership, the Department of Education seems determined to deny student borrowers the financial relief to which they are entitled,” said Aaron Ament, president of the National Student Legal Defense Network, which is representing the plaintiff. “The students we are trying to help have been doubly victimized — first by the for-profit colleges that deceived them, and now by the federal government that refuses to help.”

The regulation establishes a process for students who have been defrauded by for-profit schools and other entities to have their federal student loans canceled.

DeVos planned to replace the rule with her own version set to take effect as early as 2020, stating the previous regulation made it too easy for students to cancel their debts.

Last month a federal judge ruled the Obama-era student loan protections must go into effect immediately after previously ruling DeVos’ delay tactics were “arbitrary and capricious.”

The lawsuit states DeVos hasn’t implemented the protections since the ruling, preventing eligible borrowers who attended school on about 1,400 campuses between November 2013 and November 2015 from receiving immediate debt relief.

If the rule were fully implemented it would cancel about $250 million in debt for tens of thousands of borrowers, the Housing and Economic Rights Advocates estimated.


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