Devos Under Fire for Obstacles to Student Debt Relief

WASHINGTON (CN) – A federal judge blocked the Education Department on Monday from dismantling an Obama-era regulation intended to protect student-loan borrowers from predatory lending practices.

“The court concludes that, as with most unlawful agency actions, the proper remedy here is vacatur,” U.S. District Judge Randolph Moss wrote.

Days earlier, Moss had found that Education Secretary Betsy DeVos’ efforts to delay the protections known as the borrower-defense rule were unlawful.

In particular, Moss rebuked the secretary for hinging her stay of the borrower-defense rule on section 705 of the Administrative Procedure Act.

Monday’s ruling gives the Education Department 30 days to remedy flaws in the 705 stay while a separate challenge to the legality of four aspects of the borrower-defense rule moves forward.

At the forefront of that constitutional challenge is a trade group with 150 members called the California Association of Private Postsecondary Schools. CAPPS, as the group is known, represents a number of for-profit colleges that cater to nontraditional students, and says the Obama rule overly burdens them.

Finalized in the waning days of the Obama administration, the rule at issue offers full debt forgiveness to students misled by for-profit colleges about things like job-placement rates and guaranteed employment upon graduation.

Before the rule could take effect on July 1, 2017, however, Devos cited the CAPPS suit as justification for putting the change on hold. Devos has since sought two additional delays, most recently seeking to postpone the rule’s implementation until July 1, 2019.

Moss vacated the agency’s latest delay Monday after having found on Sept. 12 that all three of the agency’s delay attempts were unlawful.

Defrauded students and 19 Democratic attorneys general brought separate lawsuits last year against DeVos for trying to delay the rule, claiming that the Education Department had skirted statutory requirements in doing so. The cases were later consolidated.

Adam Pulver with the Public Citizen Litigation Group, who along with the Legal Services Center of Harvard Law School had sued on behalf of the defrauded students, called Monday’s ruling a “victory.”

Pulver also expressed concern, however, about the implications of the 30-day stay of Moss’ order.

“I think we remain concerned that the department may use this time period to continue to unlawfully act and come up with a new way to delay the rule that should’ve gone into effect 14 months ago,” Pulver said in a phone interview. “However we will remain vigilant and if the agency continues to act unlawfully we intend to challenge any unlawful action.”

That said, Pulver expressed doubt that the Education Department could remedy the deficiencies Moss identified in the 705 stay.

“Judge Moss identified such severe flaws in the department’s reasoning in all three of its delays that he indicated were unlawful that it would be impossible for the department to address those concerns based on the record, which shows that students continue to be harmed,” Pulver added.

The Education Department did not respond to a request for comment.

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