Some student loan holders may feel relief after a recent federal court ruling on Wednesday. In October of 2016, the U.S. Department of Education announced final regulations “to protect student borrowers against misleading and predatory practices by postsecondary institutions and clarify a process for loan forgiveness in cases of institutional misconduct.”
U.S. Secretary of Education Betsy DeVos had sought to delay the implementation of these regulations. According to Bloomberg:
‘U.S. Secretary of Education Betsy DeVos lost a lawsuit brought by 19 states and the District of Columbia, accusing her department of wrongly delaying implementation of Obama-era regulations meant to protect students who took out loans to attend college from predatory practices.’
On Wednesday, a Washington federal court judge ruled that the department’s postponement of the so-called Borrower Defense rule was improper.
The rule was created by the Obama administration in the wake that some for-profit colleges enticed students with promises that they would receive an education and diplomas that would allow them to obtain jobs in their field. The reality was that many of those students couldn’t get jobs because their diplomas or certifications weren’t recognized by prospective employers. Therefore, they were left with student loans they could not repay.
Nineteen states banded together to bring the lawsuit last July.
U.S. District Judge Randolph Moss wrote in a 57-page opinions that the plaintiffs were deprived “of several concrete benefits that they would have otherwise accrued.” He stated:
‘The relief they seek in this action — immediate implementation of the Borrower Defense regulations — would restore those benefits.’
The Department of Education hasn’t responded on the matter.
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