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Rollback of Guidances
Announced on Jule 14, 2017

Policy Summary

Education Secretary Betsy DeVos has postponed the implementation of two Obama era guidances aimed at protecting students from predatory for-profit colleges. The rules that were set to go into effect on July 1, called the “borrower defense to repayment” and “gainful employment” regulations, are stricter versions of protections that were passed in the 90’s meant to address fraud in the higher education system. If they were to be allowed to continue, the rules were aimed at expediting and growing the system for erasing the federal loan debt of students who were impacted by fraudulent colleges. Furthermore, if it was found that the graduates of these colleges did not earn enough money to pay off their student debt, the rules state that the loans to these schools would be cut off. According to DeVos, instead of immediately implementing the guidances, committees will be created to evaluate and improve upon the rules that she said “—missed an opportunity to get it right.” LEARN MORE

Analysis

Meant to protect students like Neisha Wright, 40, who accumulated $25,000 in loan debt obtaining what she calls “useless credits” courtesy of the allegedly fraudulent and now defunct ITT Tech, these rules gave hope for the victims of other predatory universities that at the very least the debt could be forgiven and some justice could be achieved. Now in the midst of a lawsuit against DeVos for rolling back the protections, Wright, has described DeVos’ decision to postpone these regulations as “devastating.” Maura Healey, a Massachusetts attorney general and leader of an 18 state coalition who just days before Wright also filed a lawsuit against DeVos and her department, sees the rollback as a “betrayal” of the students and their families. The lawsuit argues that the department did not have the authority to simply remove the regulations that had already gone through the lawmaking process. LEARN MORE

Engagement Resources

  • Americans for Financial Reform – A nonpartisan and nonprofit coalition of more than 200 civil rights, consumer, labor, business, investor, faith-based, and civic and community groups, AFR sets out to lay the foundation for a strong, stable, and ethical financial system
  • Contact your state legislators – Call your representatives and let them know that protections for students are important to you!
  • Student Loan Borrower Assistance Project – A project of the National Consumer Law Center, the SLBAP is a resource for borrowers, their families, and advocates representing student loan borrowers.

This brief was compiled by Cindy Stansbury. If you have comments or want to add the name of your organization to this brief please contact, cindy@usresistnews.org.


 

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