AG to sue Devos over rollback of regulations on for-profit colleges


For The Recorder
Sunday, June 18, 2017

The state’s attorney general announced last week that she intends to sue the country’s education secretary and her department after, in a widely expected move, the U.S. Department of Education announced the beginning of a process to rollback two Obama-era regulations on for-profit colleges.

The first rule, the gainful-employment regulation, sought to hold career-prep programs accountable by limiting the portion of their overall income that could come from graduates’ loan payments. The second, the borrower-defense-to-repayment regulation, simplified the process by which students could apply for loan forgiveness if they felt their schools had defrauded them.

The borrower defense regulation was set to begin on July 1, but a California association of for-profit colleges is suing to block its implementation — a case that Attorney General Maura Healey and other attorneys general filed a motion to intervene in on Wednesday. In its news release, the education department said it will now halt that regulation’s effective date because of that case.

Healey said that regulation protects “students victimized by for-profit schools.” Healey’s office has long advocated for Massachusetts students who took out federal loans at institutions like ITT Technical Institutes, Corinthian Colleges and American Career Institute, which had a campus in Springfield.

The education department said in a Wednesday news release that a rule-making committee would be established to revise the rules later this year.

“Once again, President Trump’s Department of Education has sided with for-profit school executives and lobbyists who have defrauded taxpayers of billions of dollars in federal loans,” Healey said in a statement. “This is a betrayal of students and families across the country who are drowning in unaffordable debt.”

U.S. Secretary of Education Betsy DeVos said those regulations created a confusing process that is “unfair to students and schools,” and that a “regulatory reset” would address those issues.

The education department announced in January plans to grant some $30 million in federal loan forgiveness to 4,500 American Career Institute students in Massachusetts. Healey’s office had previously helped more than 1,200 former Corinthian students successfully apply to have their federal loans canceled.

Healey has accused the education department of delaying those promised loan discharges, and Wednesday’s announcement throws that conclusion into further doubt. The education department said in its statement that it will continue to process nearly 16,000 applications under current borrower defense rules.

Both American Career Institute and Corinthian Colleges closed in Massachusetts.