Major victory for defrauded students: Judge orders Obama-era student debt relief rule go back into effect

"It's extremely validating to see a court agree that what the Department did was wrong, and to know that students who were cheated will finally be able to seek relief."

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On Tuesday, a district judge ruled against the United States Department of Education and with defrauded students forcing the department to implement an Obama-era student debt relief rule. The rule, which was delayed for over a year by the Trump administration, allows students who attended for-profit institutions that committed fraud have their loans cancelled, also referred to as student loan forgiveness for scammed students.

Education Secretary Betsy Devos delayed the rule a month before it was supposed to go into effect, which was scheduled for July 2017. But with the delay came lawsuits. According to Common Dreams, “two former students with fraud claims sued the Education Department with the help of Public Citizen and the Project on Predatory Lending.”

“This is a major victory for students across this country in the ongoing battle against the Department of Education and the for-profit college industry,” Toby Merrill, director of the Project on Predatory Student Lending, said. “Students did not stop fighting to get this rule implemented, and now because of their work these important and long-delayed protections will immediately go into effect.”

U.S. District Judge Randolph D. Moss ruled that the Trump administration and an industry group “had failed to prove schools would be harmed if students are permitted to cancel their debts in the event of fraud,” Common Dreams reported.

“Today’s decision is a huge win for defrauded borrowers around the country,” Julie Murray, an attorney with the consumer advocacy group Public Citizen, said. “The rule is finally in effect. No more excuses. No more delays. Industry will continue to challenge the rule in court, but we will work as long as it takes to defeat those corporate interests and an administration beholden to them.”

After Devos and the U.S. Department of Education’s attempt to delay the regulation was previously ruled “arbitrary and capricious” by a different District Court, Devos attempted to redefine the rule, but that quickly failed when her proposal was denounced by California Attorney General Xavier Becerra as “flawed, harmful, and erroneously justified,” Common Dreams reported.

So, last week, Devos announced that she would no longer delay student loan forgiveness for scammed students and today’s ruling solidified just that.

“It’s extremely validating to see a court agree that what the Department did was wrong, and to know that students who were cheated will finally be able to seek relief,” Meaghan Bauer, plaintiff, said.

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