California, 21 Other States Sue Over Loan Forgiveness for Defrauded Students

California Attorney General Xavier Becerra and the attorneys general of 21 other states, plus the District of Columbia, sued U.S. Education Secretary Betsy DeVos on Wednesday over a new rule governing loan forgiveness for defrauded students.

The rule increases the burden of proof students must show to have their student loans wiped clean.

“The debate over the rule stems from a flood of loan-discharge applications after the collapse of the for-profit chain Corinthian Colleges in 2015,” Inside Higher Ed explains. “In response, the Obama administration clarified the government’s rules in 2016 to make it easier for students to get discharges. But the rule was blocked by DeVos, who announced a new, more stringent rule in July 2018. Among other things, it requires borrowers to demonstrate that their institution knowingly made false statements in advertising or recruitment materials or made promises about a program with a reckless disregard for the truth.”

“The U.S. Department of Education has replaced critical borrower protections with a process that makes it virtually impossible for victimized students to get the relief they should qualify for,” said Becerra.

The U.S. Education Department called it a “grandstanding, politically driven lawsuit meant to grab a cheap headline.”

This is the tenth lawsuit California has filed against DeVos and the Education Department.


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