Introduction
Securing student loan forgiveness can be a difficult process. Recently, a significant legal victory was achieved by 19 states and the District of Columbia. They sued Betsy DeVos’ Department of Education over its failure to implement a rule that would protect borrowers harmed by for-profit colleges. This article explains the lawsuit, the Borrower Defense rule, and its potential impact on student loan forgiveness.
What is the Borrower Defense Rule?
The Borrower Defense rule, created under President Obama, was designed to protect borrowers who suffered from predatory practices by for-profit colleges. These colleges made misleading promises about job opportunities, claiming graduates would easily secure certain positions. However, many graduates found that their degrees were not recognized by employers. As a result, they struggled to find work and repay their loans.
Under the Borrower Defense rule, if the government had to forgive loans due to these deceptive practices, the colleges would have to reimburse the government for its financial losses. This rule was meant to help borrowers who were misled into taking on debt for degrees that did not deliver the promised returns.
Betsy DeVos Delays the Borrower Defense Rule
The Borrower Defense rule was originally set to take effect in July 2017. However, the California Association of Private Postsecondary Schools filed a lawsuit against it, arguing that the rule was invalid. This lawsuit forced the Department of Education to delay the rule’s implementation.
In October 2017, Betsy DeVos’ department set a provisional date for the rule to take effect: July 1, 2018. Later, the department pushed back the implementation further, moving the date to July 1, 2019. These delays were controversial and ultimately led to a legal battle.
Judge Moss Rules Against Betsy DeVos
In 2023, U.S. District Judge Randolph Moss ruled that the delays imposed by Betsy DeVos’ department were illegal. This was a significant legal win for the 19 states and the District of Columbia involved in the lawsuit. However, Judge Moss’ ruling does not immediately reinstate the Borrower Defense rule. Instead, it opens the door for further legal action or remedies for borrowers who were affected by the delayed implementation.
What’s Next for Student Loan Forgiveness?
While the Borrower Defense rule is not yet reinstated, the court ruling has created momentum for future changes. The decision could pave the way for new actions to support borrowers who were harmed by predatory colleges. However, it remains unclear what specific steps the government will take to remedy the situation.
Conclusion
Betsy DeVos’ loss in the lawsuit over the Borrower Defense rule represents a step forward in the fight for student loan forgiveness. Although it’s unclear when the rule will be fully implemented, the ruling shows that there is still hope for borrowers who were misled by for-profit colleges. As legal developments unfold, affected borrowers should stay informed about potential remedies.
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Sources:
Friedman, Zach. (2018, September 17). Betsy DeVos Loses Lawsuit On Student Loan Forgiveness. Retrieved from https://www.forbes.com/sites/zackfriedman/2018/09/17/student-loans-lawsuit-devos/#66175bef6323
Harris, Andrew. M. & Flatley, Daniel. (2018, September 12). Betsy DeVos Loses Student Loan Lawsuit Brought by 19 States. Retrieved from https://www.bloomberg.com/news/articles/2018-09-12/devos-loses-states-suit-over-borrower-defense-rule-delay
Bloomberg. (2018, September 13). Betsy DeVos loses student loan lawsuit brought by 19 states. Retrieved from http://www.latimes.com/business/la-fi-student-loan-borrower-defense-20180913-story.html