A Washington federal court judge ruled this week that U.S. Secretary of Education Betsy DeVos and the department’s postponement of the Borrower Defense Rule was ‘procedurally improper.’ The lawsuit, brought by 19 states and the District of Columbia, accused her department of delaying regulations meant to protect students who took out loans to attend college from predatory lending practices.
The Obama administration created the Borrower Defense Rule following disclosures that some for-profit colleges lured students with promises of an education and diplomas that would allow them to get jobs in their chosen fields. However, in the end the diplomas and degrees were not recognized by employers, leaving student loan borrowers with massive amounts of debt and nothing to show for it.
Federal student loan borrowers who attended a school that misled them about the quality of their education may qualify for loan forgiveness under the borrower defense repayment rule.
The Borrower Defense Rule changed the regulations for forgiving student loans in cases of school misconduct and required “financially risky institutions” to be prepared to cover government losses in those instances, according to U.S. District Judge Randolph Moss’s 57-page ruling.
Moss continued, by postponing the effective date of those regulations, the Education Department deprived students “of several concrete benefits that they would have otherwise accrued. The relief they seek in this action — immediate implementation of the Borrower Defense regulations — would restore those benefits.”
Moss’ decision also included claims by two student loan borrowers in a lawsuit filed on behalf by the consumer advocacy group, Public Citizen.
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