California For-Profits Challenge Borrower Defense Rules

A trade association representing California for-profit colleges filed a lawsuit in federal court this week to block regulations governing debt relief for students defrauded by their college, Inside Higher Ed reported.

The Obama administration's borrower defense rule, which aims to protect students from predatory college practices, expands on and clarifies existing federal statute to spell out how borrowers who were the victims of fraud or misrepresentation by their institution can have their student loans discharged.

The lawsuit, filed with a federal court in Washington, D.C., claims that the regulations are "likely to shutter many vocational schools without any reasonable justification and will needlessly leave many non-traditional students with few or no educational options."

Many expected that Republican lawmakers would void the Obama-era rules using the Congressional Review Act, reported Inside Higher Ed. However, Congress took no action and the Trump administration has yet to detail its approach for implementation. Education Secretary Betsy DeVos told a House appropriations subcommittee Wednesday that the department would have "something further to say" on borrower defense in the next few weeks.

The regulations are currently set to take effect July 1.


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