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15 Dec, 2017 05:17

‘Unconscionable’: DeVos smacked with two suits, claiming student loan borrowers ripped off

‘Unconscionable’: DeVos smacked with two suits, claiming student loan borrowers ripped off

Four states have sued Education Secretary Betsy DeVos, claiming she and her department ripped off thousands of students who filed debt relief claims after the collapse of the massive for-profit education company Corinthian College.

The complaint, filed by Attorney General Xavier Becerra (D-California) in the US District Court for the Northern District of California on Thursday, accuses DeVos of violating the Administrative Procedures Act. It states that DeVos is unlawfully delaying the approval of claims filed by defrauded students who had federal student loans filed with post-secondary subsidiary schools owned by the now-defunct Corinthian College Company, which folded in 2015.

On the same day, New York Attorney General Eric Schneiderman, Illinois Attorney General Lisa Madigan and Massachusetts Attorney General Maura Healey filed a lawsuit in the US District Court of the District of Columbia against the administration of President Donald Trump.

The three states’ lawsuit alleges that the administration is in violation of federal law by refusing to hand down decisions on pending student loan claims from people in their states that took loans out to pay for Corinthian Colleges, the Chicago Tribune reported.

The lawsuit also claims that the administration has unlawfully declared that some of the loans in question are still valid, which has since led to involuntary collections from the paychecks of the students in question, according to Reuters.

The Education Department declined to comment on both lawsuits, and has in the past described other lawsuits filed by attorneys general in the Democratic party as a partisan attack on the Trump administration.

Becerra’s suit in California alleges that 50,000 relief claims are still pending since Corinthian’s collapse. That is up from what the Department of Education previously found in 2015, that some 80,000 students who borrowed loans, including more than 38,000 in California, were induced to enroll fraudulently in educational programs offered by Corinthian.

Becerra further writes in California’s complaint, that on January 20, the Education Department under DeVos' watch has unjustifiably and indefinitely delayed approving a single borrower-defense claim.

“The Department determined that these students qualified under its ‘borrower defense’ regulations for expedited discharge of their federal student loans and reimbursement of amounts previously paid,” Becerra wrote.

Becerra added that “the delay — 11 months and counting — is unreasonable and illegal because the Department has already determined that these students qualify for specific, expedited relief,” according to the complaint.

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The California attorney general issued a statement on his Facebook page in relation to the lawsuit on Thursday, and said DeVos’s refusal to act on behalf of the defrauded students was “unconscionable.”

“After having their American dreams stolen by a so-called higher education institution, Corinthian students are now being denied critical relief by a Secretary of Education hostile to their plight,” Becerra said. “It is hard to believe that we are forced to sue the Department of Education to compel Secretary DeVos to carry out the Department's legal duty and help these students rebuild their lives.”

Becerra also took to Twitter to further call out DeVos.

“It’s important to stand up & get what you paid for, so we're fighting for our students - & students everywhere!” he tweeted.

The same prosecutors involved in both of Thursday's lawsuits were part of the 19 state attorneys general who sued DeVos in October for delaying the implementation of a rule set forth by former President Barack Obama, designed to protect students from predatory loans offered by for-profit colleges.