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Ted Eytan

DeVos Sells Out Students for Private Gain

Education Secretary Betsy DeVos repeals rule to protect students from predatory student loans and for profit colleges

Kris LaGrange's picture
Jul 07, 2017

This week 19 States’ Attorney Generals announced that they were suing Education Secretary Betsy DeVos over her decision to suspend rules that were meant to protect students from student loan abuses by for profit colleges.  During her confirmation process, DeVos revealed that she was heavily invested in a company that provided a $147 Million loan to a debt collection agency that is contracted by the US Department of Education to collect student loan debts.  This company would have stood to lose millions if the Obama era rule was put into place.  She also recently installed CEO of a private student loan company as the head of the Office of Financial Student Aid, causing many to worry that the Department of Education will begin moving lending responsibilities from low interest public loans to more high interest predatory private loan companies.  Any teacher who voted for Trump should be punched in the face. Read more about the lawsuit below from the Associated Press.

Democratic attorneys general from 18 states and the District of Columbia sued U.S. Education Secretary Betsy DeVos on Thursday over her decision to suspend rules that were meant to protect students from abuse by for-profit colleges.

The lawsuit, filed in federal court in Washington, says DeVos violated rule-making laws when she announced a June 14 decision to delay so-called borrower defense to repayment rules, which were finalized under President Barack Obama and scheduled to take effect July 1.

In her announcement saying the rules would be delayed and rewritten, DeVos said they created "a muddled process that's unfair to students and schools." The Education Department didn't immediately comment on the suit.

The rules would have forbidden schools from forcing students to sign agreements that waive their right to sue. Defrauded students would have faced a quicker path to get their loans erased, and schools, not taxpayers, could have been held responsible for the costs.

A final version of the rules was announced last fall after nearly two years of negotiations. The Obama administration started pursuing new rules after the Corinthian Colleges chain shut down in 2015 amid allegations of misconduct, leading to a flood of applications from students seeking to get their loans forgiven.

Massachusetts Attorney General Maura Healey, who is leading the lawsuit against DeVos, said the regulation was a "common-sense measure" meant to protect students.

"Since Day One of the Trump administration, Secretary of Education Betsy DeVos and the administration have sided with for-profit schools over students," Healey told reporters. "For me and my colleagues, it's simple: When students and families are cheated out of an education and taxpayers foot the bill, everybody loses."

The lawsuit says DeVos and the Education Department failed to take legally required steps to delay already established rules. It says they failed to open the decision to public comment and failed to provide an adequate legal justification for delaying the rules, among other faults.

In June, the Education Department said it was delaying the rule because a federal court was weighing a lawsuit brought by a California trade group made up mostly of for-profit colleges seeking to block the rules. The department cited a law allowing such a delay for litigation if it's found "that justice so requires."

The attorneys general said that justification is "a mere pretext" for repealing and replacing the regulation.

The other states that joined the lawsuit are California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.

Last week, a group of 47 Democrats in Congress, along with independent Sen. Bernie Sanders of Vermont, sent a letter to DeVos opposing the delay, saying the department had never used litigation as a reason to delay rules.

A separate lawsuit against the Education Department was filed Thursday on behalf of two former students of a Boston-area for-profit college. The suit says the students were counting on protections in the new rules to sue the New England Institute of Art, which they say deceived them and left them with few job prospects and heavy debt. The school's parent company did not immediately comment.

"Secretary Betsy DeVos has effectively revoked students' rights under the rule while giving a pass to predatory schools that wield influence with this administration," said Julie Murray, an attorney for Public Citizen, a liberal think tank in Washington that's representing the students. Read more from the AP.

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