Faced with so many students collectively on the hook for millions of dollars in loans from defunct institutions accused of fraud, the Obama administration took up the task of clarifying and simplifying "borrower defense," a rule that long had been on the books.

After two years of negotiations, the final rule was announced at the end of October. It allowed for automatic relief when large numbers of students were affected by a college shutdown. It required colleges under regulatory scrutiny to put up collateral to share the cost of making students whole in the event of a shutdown. And it banned schools from making students sign arbitration agreements waiving their rights to a class action lawsuit in case of misconduct.

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Now, all of that is on pause. In her announcement of the "regulatory reset" last month, DeVos said, "last year's rule-making effort missed an opportunity to get it right. The result is a muddled process that is unfair to students and schools, and puts taxpayers on the hook for significant costs." She said, however, that 16,000 pending borrower defense claims will continue to be processed.

The lawsuit alleges the department violated federal law by suddenly and unilaterally axing the rule without allowing stakeholders to weigh in again.

These rules served as critical protections against predatory for-profit schools," New York State Attorney General Eric Schneiderman said in a statement. "Yet the Trump Administration continues to work against New York's students —instead allying themselves with unscrupulous actors in the higher education industry."

U.S. Department of Education press secretary Liz Hill told NPR that the suit is "ideologically driven." She referred to a separate lawsuit seeking to stop borrower defense from taking effect, this one filed by a trade group that represents for-profit colleges in California. "The suit makes serious and credible charges that the borrower-defense regulations exceed the statutory authority conferred on the Department." And she added, "The borrower-defense regulations suffer from substantive and procedural flaws."

Read the source article at npr.org

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