Betsy DeVos isÂ making it harder for studentsÂ to get loan forgiveness after being cheated by for-profit colleges, but Democratic attorneys general across the country are challenging her in court. DeVos has had the Education Department put a hold on new rules that were supposed to take effectÂ on July 1 protecting student borrowersâ€”protecting student borrowers is definitely not what Betsy DeVos is about, letâ€™s be clear on thatâ€”andÂ 18 states are going to court to get the rules put back in place.
An existing federal law allows borrowers toÂ apply for loan forgivenessÂ if they attended a school that misled them or broke state consumer protection laws. Once rarely used, the system was overwhelmed by applicants after the wave of for-profit failures. Corinthianâ€™s collapse alone led to more than 15,000 loan discharges, with aÂ balanceÂ of $247 million.
Taxpayers get stuck with those losses. TheÂ rulesÂ that Ms. DeVos froze would have shifted some of that risk back to the industry by requiring schools at risk of closing to put up financial collateral. They would also ban mandatory arbitration agreements, which have prevented many aggrieved students from suing schools that they believe have defrauded them.
DeVos really is stepping in in favor of fraudulent schools over defrauded studentsâ€”and taxpayersâ€”in other words.
â€śSince day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordableÂ student loans,â€ť said Maura Healey, the Massachusetts attorney general, who led the multistate coalition. â€śHer decision to cancel vital protections for students and taxpayers is a betrayal of her officeâ€™s responsibility and a violation of federal law.â€ť
Two students left with debts after their school lied to them about their job prospects are also suing the Education Department over the same issues.
This blog was published at DailyKos on July 6, 2017. Â Reprinted with permission.Â
About the Author:Â Laura Clawson is labor editor at DailyKos.