Eighteen states and the District of Columbia are suing Education Secretary Betsy DeVos and the Education Department over DeVos's decision to roll back rules designed to help students who have been defrauded by their colleges.
The group of Democratic state attorneys general alleges that the Education Department is breaking the law by withdrawing an Obama-era regulation, known as the "borrower defense" rule, which lays out a process for students to have their federal loans forgiven if they were defrauded by their schools.
After the Obama administration announced the rules, tens of thousands of students filed claims for loan forgiveness — the vast majority of them against disgraced for-profit colleges. Many applications had already been approved.
But the process has now ground to a complete halt. In response to a Freedom of Information Act request by BuzzFeed News, the Education Department said it has not approved a single fraud claim since the day of Trump's inauguration, while thousands of students already promised forgiveness are still waiting.
In June, DeVos said that she would delay implementation of the rules, which was set to go into effect on July 1, as a part a broader "regulatory reset" of some Obama-era policies targeting for-profit colleges.
In a statement Thursday, the Department called the states' lawsuit "ideologically driven." Because of the regulations' flaws, the Department said, DeVos had "decided to take a step back and hit pause on these regulations until the case has been decided in court, and to make sure these rules achieve their purpose: helping harmed students."
Massachusetts Attorney General Maura Healey, who is leading the suit, said in a statement that DeVos had "sided with for-profit school executives against students."
The department cited a lawsuit by a for-profit college trade association as the reason it was delaying implementation of the rules. But the states suing DeVos allege that the trade group's lawsuit was a "mere pretext" for replacing the rules. They say the department cannot simply stop enforcing regulations that it doesn't like without following procedures like asking for comment from the public.
Internal documents obtained by Politico found that the Education Department had considered using other explanations for a delay before it decided to cite the lawsuit, like saying it needed "time to review" the regulations and their cost for taxpayers.
The regulation is widely disliked by for-profits, but has also been criticized by some other vulnerable colleges, like historically black schools, who say it puts a financial burden on them without providing due process when students allege fraud. In addition to laying out a process for loan forgiveness, the rules also attempt to hold colleges financially accountable if they defraud students, taking the burden for loan forgiveness off of taxpayers.
Separately, two non-profit groups — Public Citizen and the Project on Predatory Student Lending — also filed a lawsuit against DeVos and the Education Department on Thursday, alleging the department broke the law when it rolled back the borrower defense rules.