For Immediate Release - July 06, 2017

AG Healey Sues Education Secretary Betsy Devos and U.S. Department of Education for Abandoning Critical Student Protections

Leads Coalition of States in Lawsuit Against DeVos for Canceling Rules That Protect Students and Taxpayers from Abuse by Predatory For-Profit Schools

WASHINGTON, D.C. – Standing up for students in Massachusetts and across the country, Attorney General Maura Healey today led a coalition of 19 states in suing the U.S. Department of Education and Secretary Betsy DeVos for abandoning critical federal protections that were set to go into effect on July 1, 2017. 

The complaint, pdf format of Filed Complaint Massachusetts et al v. DeVos.pdf
filed in U.S. District Court, alleges that the Department of Education violated federal law by abruptly rescinding its Borrower Defense Rule which was designed to hold abusive higher education institutions accountable for cheating students and taxpayers out of billions of dollars in federal loans. The rule was finalized by the Obama administration in November 2016 after nearly two years of negotiations, following the collapse of Corinthian Colleges, a national for-profit chain.

 “Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” AG Healey said. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law. We call on Secretary DeVos and the U.S. Department of Education to restore these rules immediately.”  

In May 2017, Secretary DeVos announced that the Department was reevaluating the Borrower Defense Rule. On June 14, the Department announced its intent to delay large portions of the Borrower Defense Rule without soliciting, receiving, or responding to any comment from any stakeholder or member of the public, and without engaging in a public deliberative process. The Department simultaneously announced its intent to issue a new regulation to replace the Borrower Defense Rule.

In a short notice published in the Federal Register, the Department cited pending litigation in the case California Association of Private Postsecondary Schools (CAPPS) v. Betsy DeVos as an excuse for delaying implementation of the Borrower Defense Rule. State attorneys general argue in their lawsuit that “the Department’s reference to the pending litigation is a mere pretext for repealing the Rule and replacing it with a new rule that will remove or dilute student rights and protections.”

Last month, AG Healey led a coalition of attorneys general in filing a motion to intervene in the CAPPS case in order to defend students and taxpayers from the challenge to the Borrower Defense Rule brought by the plaintiffs – a trade association representing many for-profit schools.

Additionally, without the protections of the current Borrower Defense Rule, many students who are harmed by the misconduct of for-profit schools are unable to seek a remedy in court. The Borrower Defense Rule limits the ability of schools to require students to sign mandatory arbitration agreements and class action waivers, which are commonly used by for-profit schools to avoid negative publicity and to thwart legal actions by students who have been harmed by schools’ abusive conduct.

Today’s complaint asks the Court to declare the Department’s delay notice unlawful and to order the Department to implement the Borrower Defense Rule.

AG Healey’s Office served on the Department of Education’s negotiated rulemaking committee that helped develop the Borrower Defense Rule – in large part as a result of state and federal investigations into for-profit schools such as Corinthian Colleges. Under the rule, a successful enforcement action against a school by a state attorney general entitles borrowers to obtain loan forgiveness, and enables the Department of Education to seek repayment of any amounts forgiven from the school. Attorney General Healey has assisted more than 5,500 victimized Massachusetts borrowers in securing millions in federal student loan relief.

The coalition involved in today’s lawsuit, led by AG Healey, include the attorneys general of Massachusetts, California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.

In another lawsuit filed today against the Department of Education, the consumer rights advocacy group Public Citizen and the Project on Predatory Student Lending argue on behalf of two student borrowers that the delay of the Borrower Defense Rule is unlawful.

AG Healey continues to lead efforts to help students who were deceived by predatory for-profit schools – and has secured debt relief for students that went to Corinthian Colleges and the American Career Institute. The AG’s Office has also reached settlements worth more than $6 million with Kaplan Career Institute, Lincoln TechSullivan & Cogliano, and Salter College, and has filed a lawsuit against ITT Tech. The AG’s Office has rallied state attorneys general and members of Congress to speak out on the importance of loan discharge, authored letters, and organized calls and meetings with the Department of Education to help students struggling with their federal loan debt.

Students looking for more information or assistance should visit the AG Healey’s Student Lending Assistance page or call the Student Loan Assistance Unit Hotline at 1-888-830-6277.