Re De’pt of Educ efforts to eliminate protections for student borrowers

I try not to use the blog to tout Public Citizen's own work, but nonetheless want to provide two updates on our work to maintain protections for student borrowers in the face of a Department of Education no longer interested in doing so:

First, on Friday, Public Citizen and Harvard's Project on Predatory Student Lending filed suit on behalf of Meaghan Bauer and Stephano Del Rose, former students of the for-profit New England Institute of Art (NEIA) in Brookline, Massachusetts, to challenge the Department's delay of a rule designed to protect students defrauded by predatory for-profit colleges and career training programs. The students allege that NEIA, which is owned by Education Management Corporation, engaged in unfair and deceptive practices against them and other students that left them with a useless education, few job prospects and significant debt. The students intend to bring suit against the school for its conduct, and they had been counting on an Education Department rule finalized in 2016 that prohibits schools receiving federal funds from relying on forced arbitration clauses with their students. This Borrower Defense rule would ensure that Bauer and Del Rose have their day in court in a suit against NEIA. The rule also would provide Bauer and Del Rose with new protections and transparency when the Education Department considers their borrower defense applications. The suit filed on Friday explains that the delay violates the requirements of the Administrative Procedure Act.

The complaint is here.

Second, this week, Public Citizen is testifying at public hearings in Washington, D.C., and Dallas, Texas, to press for enforcement of a delayed U.S. Department of Education rule that would protect students from forced arbitration provisions buried in enrollment contracts with predatory schools. The rule, adopted in 2016 but delayed by President Donald Trump’s Department of Education, took more than a year to be finalized and would bring relief to tens of thousands of students of color, veterans and other Americans. Secretary Betsy DeVos has announced that the department intends to reconsider the 2016 rule in a new rulemaking. By delaying and revisiting the 2016 rule, the administration is revoking the rights of thousands of Americans who were deceived into taking on debt for worthless degrees at predatory schools, often concentrated in the for-profit college sector.

The testimony of Public Citizen's Julie Murray is here.

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