July 6, 2017

AGs sue U.S. Education Department over delay of debt rule

Gage Skidmore

U.S. Secretary of Education Betsy DeVos speaking at the 2017 Conservative Political Action Conference (CPAC) in National Harbor, Maryland. Flickr cc

New Mexico’s Attorney General signed onto a lawsuit against the head of the U.S. Department of Education over rescinding protections for students who borrow money for college.
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[/perfectpullquote]AG Hector Balderas is one of 19 attorneys general from around the country that sued Department of Education Secretary Betsy DeVos over her actions on the Borrower Defense Rule, an Obama-era rule aimed at protecting students who borrowed money from debt at colleges guilty of misconduct.

The attorneys general are asking a court to order the Education Department to enforce the rule.

The rule came, in large part, because of the collapse of Corinthian Colleges, a for-profit college whose students had an extremely high default rate on student loans. Heald College, one of the Corinthians College schools, was eventually fined nearly $30 million by the federal Department of Education for misleading statements about employment rates of graduates.

Days later, the college shut down all remaining campuses, just weeks before declaring bankruptcy.

The rule, which was slated to go into effect this month, was aimed at making sure students of such colleges received debt relief. In May, DeVos announced a review of the rule. And weeks later, in mid-June, the Education Department announced it would indefinitely delay large portions of the rule.

“I filed this lawsuit because I will not stand by while New Mexico students fall victim to predatory, out-of-state education companies seek to harm them and drown them in unnecessary debt,” Balderas said in a statement Thursday. “Thousands of New Mexicans are still suffering the effects of these predatory practices from for-profit institutions we have already shut down, and our office continues to seek and secure financial relief for those students.”

In addition to New Mexico, attorneys general from 16 other states and the District of Columbia signed onto the suit.

Suit against Education Department over Borrower Defense Rule delay by New Mexico Political Report on Scribd