The U.S. Department of Education will miss a November deadline to repeal the Obama-era revisions that help student loan borrowers for the 2019 school year. The rule erases the federal student debt of borrowers defrauded by colleges.
Adopted in the 1990s, the rule cancels federal loans for students whose colleges used deceptive or illegal tactics to encourage them to get loans to attend.
The Obama administration revisions streamlined the claims process and shifted more of the cost to schools for discharging loans. The changes were scheduled to take effect in July, but the department postponed them for a year and said it would appoint a new rulemaking committee to rewrite the entire regulation. Education Secretary Betsy DeVos wanted more time for the committee to work on its revisions.
In lawsuits on the department’s attempts to delay carrying out the rule, a federal judge recently said that its attempts were “arbitrary and capricious.” Although an industry group is asking a court to block the rule, it’s currently set to become effective on Oct. 12.
“Tuesday’s development means that a Trump administration effort to replace the Obama-era borrower defense rule cannot possibly take effect until July 2020,” said Julie Murray, attorney for Public Citizen, a consumer advocacy group. “That’s good news for the public because Secretary Betsy DeVos’ proposed rule would gut protections for borrowers and leave taxpayers footing the bill for predatory schools’ risky conduct.”
It’s high time for the secretary to stop making excuses and put the Obama-era rule in place, as it should have been for more than a year now, Murray said.
“Students deserve the benefit of a rule intended to protect them from higher ed hucksters,” she said.
The department delayed the 2016 rule revisions three times.
