DeVos sued over failure to cancel some student loans

Nov. 14, 2018
The suit contends that the Education Department is failing to cancel loans made to college students whose schools had closed, even though a judge has ruled that the department must do so.

A lawsuit filed against U.S. Education Secretary Betsy DeVos asserts that the Education Department — as required by an Obama-era regulation — is failing to cancel loans made to students whose schools closed before they could earn their degrees.

The Washington Post reports that the suit was filed in California by Housing and Economic Rights Advocates, a nonprofit legal service and advocacy organization. The housing group is represented by the National Student Legal Defense Network, which has challenged a series of DeVos moves.

DeVos had tried to cancel the regulation, which governs the circumstances under which borrowers can have their debt erased. But a federal court ruled last month that the regulation must take effect.

During the Obama administration, officials said that students should not be responsible for debt when they did not get the education they were promised. In some of those cases, students were bilked by for-profit schools and deceptive marketing.

DeVos contended that the rule made it too easy for students to cancel their debts; she said she would replace the regulation with her own version. The earliest the new rule will begin is July 2020.

In the meantime, the federal court ruled, DeVos cannot simply ignore the version put in place by her predecessor.

Under one provision, the Obama rule directed the Education Department to proactively cancel debts of students whose schools closed before they received their degrees. It did not require that students apply for or request the cancellation.

People who attended school on about 1,400 campuses that closed between November 2013 and November 2015 may be eligible for immediate debt cancellation, the legal network said.

The legal defense network estimated that if the rule were fully carried out, it would result in $250 million in canceled debt of tens of thousands of students.

“The Department of Education seems determined to deny student borrowers the financial relief to which they are entitled,” says Aaron Ament, president of the network.

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