Democratic attorney generals from 18 states plus the District of Columbia has sued DeVos and the Department of Education after she halted new rules from being implemented that would eliminate student loan debt from students that were taken advantage of by their colleges.
The first lawsuit [PDF] was filed by Public Citizen on behalf of two former students at the New England Institute of Art (NEIA) who owe a total of more than $80,000 in federal student loans and interest.
These defects became conspicuous during the Obama administration's final years, as hundreds of for-profit colleges collapsed amid accusations of widespread fraud.
Last Friday, DeVos said she was also suspending the new "gainful-employment" rule, another hallmark of the Obama administration that was set to take effect in July. But consumer advocates and liberal lawmakers contend that the changes achieve exactly the opposite by speeding up loan discharges and having colleges foot more of the bill.
The rules are referred to as borrower defense and would protect students that attend colleges deemed to have acted fraudulently.More news: PM Modi to meet 2008 Mumbai terror attack survivors in Israel
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Elisabeth Dee DeVos is an American businesswoman, politician, and activist who is the 11th and current United States Secretary of Education.
Washington D.C. and 18 other states are suing Education Secretary Betsy DeVos and the Education Department after DeVos' choice to undo rules created to aid students who have been defrauded by their colleges. But less than a week after Secretary of Education Betsy DeVos finally announced her plans in late June, attorneys general from eighteen states and the District of Columbia sued her. 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.
Hit with a federal lawsuit about its deceptive ads that resulted in the institution forgiving millions in debt and offering millions more in refunds to its students, DeVry is one of many for-profit colleges that have drawn the ire of the regulators and watch-dog groups.
For-profit schools have been especially critical of the borrower-defense rule. In 2009 and 2010, for-profit businesses accounted for almost a quarter of the federal loans distributed, despite having just 10 percent of the total enrollment. The filing says that as it stands, the borrower defense rule "deters misconduct by educational institutions, and protects the well-being of the states' respective residents".
DeVos also criticized the rules as "a muddled process that's unfair to students and schools", and she said she would establish a new rule-making committee to reconsider the matter.
In April, Education Secretary Betsy DeVos made known her stance on assisting students with loans after she did away with legal regulations implemented by President Barack Obama in October -- which served the goal of aiding those riddled with student debt. The Obama administration admitted "that the regulations would cost taxpayers $16.6 billions over the next decade".