After US Education Secretary Betsy DeVos Overhaul Student Loan Forgiveness Policy, 23 AGs File Case

Betsy DeVos new student loan policy not gone well with AGs

Highlights:

  • US Education Secretary Betsy DeVos sued over Student Policy
  • Attorney Generals from over 20 states have sued her
  • Donald Trump saved the policy through the veto

On the 15th of July, Wednesday, the Democratic Attorney Generals (AGs) of over 20 states sued the US Education Secretary Betsy DeVos seeking to repeal her overhaul of Studen Loan Forgiveness Programme.

The Congress voted to strike down her policy, which makes it all the more difficult to get federal student loans erased, however, the President of the United States of America saved it by using the veto.

A coalition of 22 states and the District of Columbia, which was led by Massachusetts and California, are now challenging DeVos’ policy in a federal suit which has been filed in San Francisco.

The AGs claim that DeVos has violated federal rules by issuing the policy without any justification and add that her rules fail to create any meaningful process for defrauded students to get the federal loan forgiven.

The suit which has been filed seeks to have DeVos’ policy to be repealed and replaced by a rule which was earlier presented under the former President of the US, Barack Obama.

Xavier Becerra, Attorney General from California alleges that Betsy DeVos rewrote the rules in order to protect the predatory for-profit colleges and added that DeVos’ update makes it almost impossible for the cheated students to get their federal loans forgiven.

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Becerra said, “They rigged the system against students, flat and simple,” during a call with a reporter.

The Education Department called this case, “another grandstanding, politically driven lawsuit meant to grab a cheap headline.”

Angela Morabito, Spokeswoman of the Department said, “To any objective observer, our borrower defence rule clearly protects students from fraud, ensures they are entitled to financial relief if they suffered harm and holds schools accountable,” in a statement.

The dispute has stemmed from a policy which is known as the borrower defence to repayment, which allows the borrowers to get their federal student loans erased if their colleges made false claims to get them to enrol.

The Obama administration expanded the policy to forgive the loans of thousands of affected students who attended for-profit colleges and were lied about the success of their graduates.

However, in 2017, DeVos suspended the rules and issued her own policy in 2019 arguing that was becoming too easy for the borrowers to have their federal student loans forgiven.

A report said, “Her update set a higher bar for loan relief, requiring students to prove their colleges knowingly misled them and caused personal financial harm, among other changes.”

Though the Congress voted to repeal DeVos’ policy via a bipartisan bill which was approved in March, Trump used the veto to overrule and save it. The House Democrats tried to override the veto in June but failed to gather enough Republican votes.

The suit alleges that the Educational Department is seeking to justify its changes through “inaccurate, unsupported and inconsistent claims.” It added that, for example, the department repeatedly cited its own experience in processing loan forgiveness claims, even though it has not yet approved or denied a single claim when the overhaul was issued.

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It also argues that the policy creates “arbitrary impediments” for students including the requirement where they prove not only that they were misled by their schools but also that the school did it knowingly.

According to the suit, “A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law — but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake,”.

DeVos, separately, challenged the policy to offer only partial loan relief to most of the students. Her update provides full discharges only if the student attends the programs which produce graduates with average earning which are much lower than those of graduates of similar programs.

Other students get portions of their loans erased. The rule in Obama-era offered full loan forgiveness only.

As per the Federal law, the Education Department needs to implement a meaningful process for the defrauded borrowers in order to get their federal student loans forgiven, however, the suit argues that DeVos’ new policy fails to follow it.

DeVos has been facing repeated legal challenges over this rule and it has now become a frequent source of conflict with the Democratic lawmakers who claim that the Trump administration has stopped processing the claims while DeVos changed the policy.

In April, DeVos agreed to process the backlog of around 1,70,000 claims in under 18 months to settle one of many federal lawsuits she faced.

As of May, the Educational Department reported it has around 1,28,000 pending applications. Additionally, among all the completed claims, close to 58,000 have been approved while the rest, give or take 54,000, have been rejected.

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Shivani Singh

Shivani has been an avid reader of newspapers since her childhood and likes to know what is happening around the world. Her love for news and bringing forth the absolute is what drove her writing for the people. She has worked in the industry for over 4 years and believes that people’s basic rights should always be honoured. Apart from reading, she is a foodie and loves to try her hands-on cooking different cuisines.

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