Wednesday, November 14, 2018

Federal judge rules against Education Department in student borrower protection cases

"This is such an important win for student borrowers and anyone who cares about a government that operates under the rule of law."

Image Credit: Spencer Platt/Getty Images

After the Trump administration postponed a student borrower protection rule, two students and Democratic attorneys general from 19 states and the District of Columbia challenged the government and won. U.S. District Court Judge Randolph D. Moss ruled in favor of the plaintiffs claiming the delaying the “student borrower protection rule was improper and unlawful,” NPR reported.

“This is such an important win for student borrowers and anyone who cares about a government that operates under the rule of law,” Toby Merrill, Harvard Law School’s Project On Predatory Student Lending, said.

The “borrower defense” allows a student attending a college who was misled, or if the school engaged in misconduct, to apply to student loan relief. The rule was put in place in the mid-1990s, but produced very few claims because of its obscurity until the collapse of for-profit Corinthian Colleges and ITT Tech when the Obama administration clarified and updated the rule.

Education Secretary Betsy DeVos “has taken several actions to delay the Obama-era rule,” NPR reported. And the federal judged ruled the delay was “unlawful” and “arbitrary and capricious.” The judge went on to rule that in the two student plaintiff cases, the Department of Education deprived them “of several concrete benefits that they would have otherwise accrued under the Borrower Defense Regulations.”

After a hearing scheduled for today, the judge will determine how the Department should proceed in handling the present and future cases.

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