Attorney General Kwame Raoul joined a coalition of 16 attorneys general in filing a lawsuit against U.S. Secretary of Education Betsy DeVos and the U.S. Department of Education challenging their action to unlawfully repeal the 2016 borrower defense regulations and replace them with regulations that do nothing more than benefit predatory for-profit schools at the expense of defrauded students. In the lawsuit, filed in the U.S. District Court for the Northern District of California, Raoul and the coalition argue that the department’s decision to repeal and replace the regulations violates the Administrative Procedure Act (APA), and the coalition asks the court to vacate the department’s new regulations. The 2016 borrower defense regulations established critical protections for student-borrowers who were misled or defrauded by predatory schools by providing borrowers with an efficient pathway to obtain relief from their federal student loans. In the lawsuit, Raoul and the coalition argue that the department’s repeal and replacement of the 2016 borrower defense regulations violates the APA because:
• It is arbitrary and capricious. The decision to repeal and replace the 2016 rule was not the product of reasoned decision making as required by the APA. In explaining its rationale for the new regulations, the department rejected prior agency determinations going back decades without explanation, grounded its analysis in fundamental misunderstandings, failed to consider alternatives, and disregarded facts and circumstances.
• It does not comply with Congress’s requirement that the secretary implement a meaningful process for borrowers to obtain relief. Instead, it establishes an illusory process that makes it practically impossible for students to qualify for borrower defense relief. The department admits as much by acknowledging that only around 4 percent of borrowers eligible for relief will actually get relief.
Student borrowers who have questions or are in need of assistance can call the Attorney General’s Student Loan Helpline at 1-800-455-2456. Borrowers can also file complaints on the Attorney General’s website.
