Court ruling goes against DeVos
WASHINGTON — Education Secretary Betsy DeVos’ move to delay Obama-era protections for students defrauded by for-profit colleges was dealt a setback when a federal judge found her actions to be “arbitrary and capricious.”
U.S. District Judge Randolph Moss ruled Wednesday in a lawsuit challenging the delay that had been filed by Democratic attorneys general from 19 states and the District of Columbia and former students, finding that DeVos’ actions were unlawful.
The case centered on the borrower defense rule, which allowed defrauded students to have their student loans forgiven. The rule was to have taken effect on July 1, 2017. DeVos had argued those rules created “a muddled process that’s unfair to students and schools.”
But Moss found inconsistencies in DeVos’ rationale for freezing the rule.
“When an agency decides to delay the effective date of a rule to save the federal government money or to alleviate confusion or a burden on regulated parties while the agency decides whether to amend or to rescind the rule, its action is ‘designed to implement ... policy,”’ Moss wrote in his decision.
Massachusetts Attorney General Maura Healey, who led the lawsuit, said the ruling was “a victory for every family defrauded by a predatory for-profit school.”
Toby Merrill, a litigator at Harvard University’s Project on Predatory Student Lending, which represents defrauded students, hailed the decision as “a huge a rebuke to the department.”
“It’s a really big deal, it’s an incredibly important win for student borrowers and really for anyone who cares about having a government that operates under the rule of law as opposed to as a pawn of industry,” Merrill said.
After two decades to rapid growth, the for-profit college industry was shaken by the implosion of two major chains of schools that misled students with promises they couldn’t keep and left them with large amount of debt they couldn’t pay.
The Obama administration went hard after the sector, issuing regulations meant to increase student protection.
In trying to delay the borrower defense rule, Devos said the regulations were too broad and allowed for potential abuse on the part of students. She vowed to create a new system.
But critics dismissed the freezing of this and other regulations as an attempt by DeVos to promote industry interests.
They point to the fact that DeVos has hired for-profit industry insiders to top positions at her agency.
