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October 24, 2017

Department of Education Delays Regulations Protecting Student Borrowers from For-Profit Schools

WASHINGTON, D.C.—Secretary of Education Betsy DeVos has delayed implementing regulations that would require for-profit colleges convicted of fraud to pay the debt of former students, Danielle Douglas-Gabriel reports for the Washington Post. Student borrower protections created in the 1990s that eliminate the debt of students who were defrauded by for-profit colleges with deceptive claims of post-graduation employment opportunities were revised under the Obama administration to simplify the claims process and shift more of the cost of discharging the loans from the federal government to the schools. The Obama-era regulation was slated to take effect in July 2017. DeVos has advised further review of the rule, potentially postponing its implementation until July 2019, if at all.

“This is another illegal delay by Secretary DeVos to allow predatory for-profit colleges to cheat students and taxpayers,” Massachusetts Attorney General Maura Healey said. “Our office will fight these unlawful attempts by the Department of Education to abuse vulnerable students and families who are drowning in unaffordable debt.” Healey is leading a group of nineteen state attorneys general in a lawsuit filed in July 2017 against the Education Department over the delay.

More than 87,000 student debt claims against for-profit colleges are pending review, and another 10,000 have been recommended for approval, but the Department of Education has yet to process any loan repayment. Secretary DeVos alleges the Obama-era regulation involves “a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs.” The department has argued that new legislation would be unable to be approved by the November 1 deadline to be effective July 2018.

Senator Patty Murray or Washington State, ranking Democrat on the Senate Health, Education, Labor and Pensions Committee said, “Instead of giving predatory corporations the greenlight to continue to take advantage of students, Secretary DeVos needs to stop these outrageous delays and start providing relief to the tens of thousands of students who have been cheated out of their education and savings.”

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