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Laura Meckler
Reporter dealing with national politics and trends in education and the Department of Education
The rules of the Obama era explaining how students defrauded by colleges can clear their debt came into effect on Tuesday after the Trump administration and a for-profit college association lost their offers to delay them. .
This means that Education Secretary Betsy DeVos is now responsible for enforcing a rule that she says is making it too easy for students to cancel their student loan and has been fighting to kill .
Consumer advocates support the regulations, saying the government needs to take a more aggressive stance toward colleges, which they say systematically exploit veterans and vulnerable students.
But conservatives worry about the impact on taxpayers if a large number of student borrowers are allowed to avoid paying back their loans. In addition, colleges, especially for-profit corporations, have opposed the rules of the Obama administration because they harmed their programs and students in search of loans.
In June 2017, DeVos suspended the regulation and announced that it would replace it with his own. Two former students from a for-profit college, as well as 19 states and the district, have taken legal action to stop the delay.
Last month, a US district court declared DeVos' move "arbitrary and capricious" and that the rules should come into effect. This left the agency until last Friday to try to postpone further delay, but the Education Department said it would not try again.
"The secretary respects the role of the court and will decide if some parts of the 2016 rule will come into effect," DeVos spokeswoman Elizabeth Hill said Friday.
But there was another obstacle. In a related lawsuit, the California Association of Private Postsecondary Schools, an industry group, had asked the court to block the rules. On Tuesday, the court dismissed the motion and let the by-law come into force.
US District Judge Randolph D. Moss stated that the association had not shown that it would suffer irreparable harm if the rule took effect, but did not pronounce on the merits. He also nodded at the long story already recorded in the case. "This is not the first (and probably not the last) chapter," he wrote.
The lawsuit will continue, but in the meantime the rules must come into force.
"Today's decision represents a huge victory for the defrauded borrowers in the country," said Julie Murray, a lawyer who represented the students who continued the ministry. "The rule is finally in force. More excuses. No more delays. The industry will continue to challenge the rule in court, but we will work as long as necessary to defeat these commercial interests and an administration that is accountable to them. "
Hill, spokesperson for DeVos, said the department still wanted to rewrite the regulations.
"Whatever the court decides, many of the 2016 regulations are bad policy and the ministry will continue to work to finalize a new regulation that protects both borrowers and taxpayers," she said.
Students have long been able to say that they are not obliged to pay back their federal student loans in the event of fraud, but these new regulations help clarify what exactly is fraudulent and other related issues.
The 2016 rule was part of a larger crackdown on for-profit colleges under President Barack Obama. Normally, this regulation would have come into effect on July 1, 2017. Instead, he was left in limbo.
This summer, DeVos released its replacement proposal, which made it more difficult to obtain debt relief for students. For example, in the DeVos version, students were required to prove that the schools had knowingly misled them in order to get their federal loan canceled. And this sabotaged a provision of the Obama administration allowing the treatment of similar claims as a group. Instead, students should prove their claims individually.
Officials said at the time that their settlement would be finalized by November 1, deadline for the coming into force of the regulation next summer. But this month, officials said the ministry would miss this deadline. They blamed a stream of public comments that need to be sorted out and taken into account.
This means that as soon as possible, the ministry can replace the rules of the Obama era, that is, July 2020.
The federal government has a virtual monopoly on the $ 100 billion annual student loan market. It is therefore important to define the rules relating to the management of fraud and other problems.
Students receiving student loans were able to apply for a loan write-off in accordance with standards established in 1995. This process was rarely used until two huge for-profit chains, Corinthian Colleges and ITT Technical Institute, collapsed at the time. following complaints about misleading marketing and predatory recruitment.
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