Hawaii is among 18 states suing U.S. Education Secretary Betsy DeVos over the Department of Education’s decision to put off student loan protections in cases involving deception and misconduct by for-profit universities.
DeVos last month said the Education Department was delaying implementation of an Obama-era rule governing student loan forgiveness, and planned to replace the regulations that were designed to hold for-profit colleges accountable following the shutdown of the Corinthian Colleges chain.
Corinthian, which ran the now-defunct Heald College in Honolulu, was forced to sell or close its roughly 30 campuses in 2015 when the company lost access to taxpayer-backed student loans after federal regulators uncovered widespread fraud for misrepresenting job placement and graduation rates.
The lawsuit, filed Thursday in federal court in Washington, claims DeVos violated rule-making laws by abruptly rescinding the so-called Borrower Defense to Repayment rule, which was scheduled to take effect Saturday. Under the regulation, students could have their loans forgiven if a college was found to have engaged in misconduct including deceptive marketing and misrepresentations about students’ future career prospects.
Hawaii Attorney General Doug Chin said 2,400 students in Hawaii were affected by the actions of Heald College, one of three schools under the Corinthian umbrella. Chin and the head of the state’s Office of Consumer Protection joined 18 states last month to ask the federal government to act quickly to continue protecting the thousands of students affected by the college chain’s shutdown and others attending for-profit campuses.
“Secretary DeVos refused and is instead bending over backwards to help for-profit colleges,” Chin said in a statement.
DeVos said while announcing the delay that the regulations were “overly burdensome and confusing.” She added that the process was “unfair to students and schools, and puts taxpayers on the hook for significant costs.”
Massachusetts Attorney General Maura Healey, who is leading the lawsuit against DeVos, said the regulations were designed to protect students. The lawsuit says the rule “deters institutions from engaging in predatory behavior and restores the rights of students injured by a school’s misconduct to seek relief in court.”
The lawsuit says when the Education Department filed its notice to delay the rule, it failed to take the proper legal steps, did not solicit or respond to any public comments as required, and did not “offer a reasoned analysis explaining its change of position.”
John King, an education secretary under President Barack Obama, took to Twitter on Thursday and called the delay announcement “an abdication of the Education Department’s responsibility to students &taxpayers.”
The lawsuit asks the court to declare the delay notice unlawful and to order the department to implement the loan-forgiveness rule.
Along with the District of Columbia, states that joined the Massachusetts suit are California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.