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Rescinding Loan-Protection Rule Leaves Wash. Students in Limbo

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Wednesday, July 12, 2017   

SEATTLE - Washington is one of 19 states suing U.S. Education Secretary Betsy DeVos for delaying a rule set to go into effect July 1 - a delay that has left many college students in limbo.

The rule was intended to help students who took out loans to attend for-profit colleges that ended up taking advantage of them through deceptive practices. Assistant state Attorney General Jeff Sprung said Corinthian Colleges, which closed in 2015, are an example of why the rule is needed, since students who attended still bear more than $380 million in loan debt.

"That's just one of the schools," he said, "and the new rules would have discharged those loans and allowed the federal government to turn around and go after the schools, to get that money back."

States also were looking to intervene in another case brought by a for-profit college association in California, which sued the Education Department over the rule. But on Tuesday, the U.S. Department of Justice filed its opposition to states intervening in that case. DeVos has said enforcing the Obama-era rule is too costly for taxpayers.

Sprung said the Obama administration spent nearly a year getting input from interested parties and the public to create this rule, and pointed out that DeVos didn't consult the public in rescinding it.

"Secretary DeVos has really failed in what we view as her primary job here," he said, "which is to protect students from the crushing debt that is caused by these unscrupulous colleges that get them to enroll through false representations."

What is known as the "Borrow Defense" rule has been supported by education groups, including the American Federation of Teachers and the National Education Association, as well as the Consumer Financial Protection Bureau.

Details of the lawsuit are online at amazonaws.com.


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