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Financial Planning > College Planning > Student Loan Debt

DeVos Sued Over Plans to End Protections for Student Borrowers

By Andrew Harris

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U.S. Education Secretary Betsy DeVos was sued for the second time by a coalition of states fighting her department’s plan to end an Obama-era rule meant to protect student loan borrowers.

(Related: States Line Up Against DeVos to Save Obama’s College Rules)

Led by Maryland Attorney General Brian Frosh, a Democrat, attorneys general from 17 states and the District of Columbia on Tuesday asked a U.S. court in Washington to overturn the Department of Education decision to delay and decline to enforce part of the Gainful Employment Rule. The department has said it is crafting a replacement.

(Related: Complaints by Student Loan Borrowers Yield Millions in Relief: CFPB)

Enacted in 2014, the measure requires for-profit and other educational institutions that rely upon federal aid for the bulk of their revenue to meet standards showing their programs prepare students for gainful employment and the ability to pay their loans.

(Related: CFPB Pursues Illegal Student Loan Practices Despite DOE Data Freeze)

DeVos’s move, without first navigating the regulatory repeal process, violates the federal Administrative Procedure Act, according to the suing AGs. The same coalition is challenging DeVos’s earlier decision to delay implementation of rules meant to shield student loan borrowers from schools’ predatory conduct.

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