Healey, other AGs sue DeVos over student loan rules
Massachusetts Attorney General Maura Healey on Thursday continued her attack on the policies of the Trump administration, leading 18 other Democratic state attorneys general in a lawsuit against US Education Secretary Betsy DeVos and her decision to delay rules that protect student loan borrowers.
The delays are unlawful and benefit the for-profit education industry, Healey said. “Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” Healey said in a statement.
Healey and the other attorneys general allege that DeVos and the federal agency violated the law and decided on the delay without seeking public comment. The agency is trying to “dilute” the protections put in place by the Obama administration in late 2016 after two years of negotiations, the attorneys general said in the complaint.
The regulations were an attempt to beef up existing laws that allowed borrowers to seek loan forgiveness if their schools had deceived them or committed fraud. They also limited the ability of schools to require students to sign mandatory arbitration agreements and class-action waivers, which are commonly used by companies to squash legal action.
In June, DeVos said the Education Department would restart the rule-making process and develop new guidelines to protect borrowers from fraud. She called the process used by the Obama administration to develop these borrower defense rules “muddled” and said it led to legal challenges from the industry. The California Association of Private Postsecondary Schools, a trade group, has filed a lawsuit to block the rules, arguing that they make it too easy for students to claim fraud so they can get their loans discharged and that the rules would harm the industry.
The lawsuit is “ideologically driven,” said Liz Hill, a spokeswoman for the Education Department. “The state attorneys general are saying to regulate first, and ask the legal questions later — which also seems to be the approach of the prior administration that adopted borrower-defense regulations through a heavily politicized process and failed to account for the interests of all stakeholders,” Hill said in a statement.
Healey’s lawsuit is the latest legal volley by her office against the Trump administration. Healey has filed or joined nearly a dozen cases challenging moves by the Trump administration to cut funding for the Affordable Care Act, enact bans on travel from several countries, and loosen environmental rules for oil and gas producers, trucks, electrical appliances, and light bulbs. Healey’s attacks have raised questions among some legal observers about whether her office will be able to focus on legal matters in Massachusetts.
On Thursday, Healey defended her decision to file suit. As attorney general, she has to protect Massachusetts consumers, many of whom were harmed when they borrowed too much and didn’t get the education they were promised by some of the for-profit schools, she said.
Attorneys general from several states — including California, Iowa, Maryland, New York, North Carolina, Rhode Island, and Vermont — and the District of Columbia joined Healey in the lawsuit. The attorneys general are asking that a judge find the Education Department’s delay notice unlawful and order the agency to implement the borrower protections.