DeVos Further Freezes Obama’s For-profit Fraud Protections - Higher Education
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DeVos Further Freezes Obama’s For-profit Fraud Protections

by Maria Danilova, Associated Press

WASHINGTON — The Trump administration is further delaying Obama-era protections for students defrauded by for-profit colleges, saying it needs more time to write new regulations.

Tuesday’s announcement renewed criticism by Democrats and advocacy groups that the administration favors the interests of for-profit universities over students.

The Education Department posted a notice in the Federal Register saying it wants to delay the borrower defense rule until July 1, 2019, while a new rule is being written. The department estimated that postponing the rule will save taxpayers $46 million.

The regulation allows students to have their loans forgiven if their schools deceived them about their education and career prospects. It also transfers some of the financial responsibility for negative outcomes to the universities and prevents schools from making students sign away their right to sue the schools.

The rule was supposed to take effect in July, but Education Secretary Betsy DeVos put it on hold while new rules were being crafted. Eighteen Democratic attorneys general have sued DeVos over the delay.

Department press secretary Liz Hill said Tuesday’s action will not affect the processing of ongoing relief claims. But the department already has come under strong criticism for sitting on more than 65,000 loan discharge claims and failing to approve a single one of them since DeVos took office.

Rick Hess, director of education policy at the conservative American Enterprise Institute, said the Obama regulation was too broad and fostered irresponsible borrowing on the part of students. He welcomed the delay, saying new rules need to be written very carefully.

“There is absolutely no doubt that thousands and thousands of students have been defrauded, at a minimum,” Hess said. “It’s also true that if you define these things too broadly, you wind up forgiving loans for students who were not defrauded but who were irresponsible when they made their decisions.”

“We can all agree there is an appropriate middle ground, but identifying that middle ground in regulation is tricky,” Hess added.

Maryland Attorney General Brian Frosh, who co-led the coalition of attorneys general in the lawsuit against the department, said delaying the regulation will not save taxpayer dollars, but instead will cost the government even more money if the students default on their loans.

“It’s another example of the Trump administration favoring these predatory for-profit schools at the expense of students, many of whom are vulnerable, and also at the expense of the federal government,” Frosh told The Associated Press.

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