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Setback to DeVos for Delaying Student Loan Protection Rule

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A delay in implementing student borrower protection rule has attracted the wrath of a federal judge who ruled against the U.S. Department of Education last week.

U.S. District Judge Randolph Moss has termed the delay in implementing key Borrower Defense Regulations, aimed to provide relief to debt-ridden students defrauded by higher education programs, as “arbitrary,” “capricious” and “unlawful.”

While ruling in favor of 19 states and two former students, the judge alleged Education Secretary Besty DeVos of “improperly” postponing the Obama-era regulations which governed the “borrower defense to repayment.”

The rule was supposed to become effective in July, but it was delayed after a consortium of for-profit colleges from California sought to block it by suing the department.

“The Court concludes that Plaintiffs have standing to challenge the delay actions; that the October 24, 2017 Interim Final Rule is based on an unlawful construction of the Higher Education Act of 1965; that the February 14, 2018 Final Delay Rule is procedurally invalid; that the Section 705 Stay is judicially reviewable; and that the Department’s Section 705 Stay is arbitrary and capricious,” the court said in a 57-page opinion.

Adam Pulver, one of the lead attorneys on the case, alleged the Trump administration of undoing the work of President Barack Obama.

“Time and time again, we’ve seen the administration ignore the law in its attempt to undo the work of the previous administration,” Pulver said. “We are pleased that the court recognized that the department’s desire to protect an industry that has defrauded thousands of students does not exempt it from complying with the law.”

While Toby Merrill, director of the Project on Predatory Student Lending, termed the ruling as a major victory for student borrowers.

“This is a major victory for student borrowers and for anyone who cares about having a government that operates under the rule of law, instead of as a pawn of the for-profit college industry,” Merrill said and added, “Today’s ruling clearly states that the department’s efforts to thwart those protections were illegal and had no basis in fact or the law.”

Another set of higher education rules, announced in July, received sharp criticism from various quarters who feared it would constitute a reversal from the strong protections issued under the Obama administration.

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