Bauer v. DeVos and CAPPS v. DeVos

Overview

On June 15, 2017, Meaghan Bauer and Stephano Del Rose, former students of EDMC-owned New England Institute of Art, moved to intervene in a lawsuit brought by the for-profit college industry because the Trump administration could not be trusted to protect students defrauded by predatory for-profit colleges and career training programs that receive federal funding.

On July 6, 2017, Ms. Bauer and Mr. Del Rose filed their own lawsuit against the Secretary of Education for illegally delaying rules intended to protect borrowers’ rights. They are represented by the Project on Predatory Student Lending and Public Citizen in both lawsuits.

On October 16, 2018, a judge refused to block the delayed rules from taking effect. As a result, the rules took effect on October 16, 2018 after more than a year of illegal delays.

Background

Ms. Bauer and Mr. Del Rose are counting on an Education Department rule finalized in 2016 that prohibits schools receiving federal funds from relying on forced arbitration agreements with their students. Forced arbitration clauses require students to submit any dispute that might later arise between the students and the institution to binding arbitration, a private process with little right to appeal, instead of a court of law. Students typically cannot band together to bring their claims jointly in arbitration, and they often are forbidden from publicly discussing the arbitration process.

This Borrower Defense rule will ensure that Ms. Bauer and Mr. Del Rose have their day in court. A for-profit school industry group, CAPPS, sued the Education Department to try to block the rule. Shortly after the lawsuit was filed, the Trump administration announced it would delay key parts of the rule until the litigation is over and begin a new rulemaking to reconsider the rule.

Case Updates

Update | LSC’s Project on Predatory Student Lending and Public Citizen Sue to Stop Education Department’s Illegal Regulatory Delay

The U.S. Department of Education broke the law when it announced a delay of a rule designed to protect students defrauded by predatory for-profit colleges and career training programs, two borrowers said in a lawsuit filed today in the U.S. District Court for the District of Columbia.

Update | Judge Rules for Project’s Clients; Strikes Down Department of Education Illegal Delay of 2016 Borrower Defense Rule

In another major rebuke to DeVos, the Project wins Bauer v. DeVos case Judge rules that the Department of Education’s delays in implementing 2016 borrower defense rule were illegal and caused serious harm to borrowers   In a victory for student borrowers, and another massive rebuke to Betsy DeVos, a court this week ruled that…

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“This turned out to be a lie,” said Del Rose, who graduated from NEIA in 2014. “The equipment was outdated, the career services office wasn’t helpful, and I ended up working at Walgreens, just like I did before graduation.”

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“While students should have protections from predatory practices, schools and taxpayers should also be treated fairly as well. Under the previous rules, all one had to do was raise his or her hands to be entitled to so-called free money.”

DeVos

CASE DOCUMENTS

09/12/2018

Memorandum Opinion and Order

On September 12, 2018, the court granted the Plaintiffs' motion for summary judgment and ordered all parties appear for a status conference on September 14, 2018.

10/02/2018

States Amicus Brief

On October 02, 2018, Massachusetts, Pennsylvania, California, Iowa, New York, Oregon, Washington, Illinois, Maryland, and the District of Columbia filed a brief of Amici opposing the renewed motion for preliminary injunction.

10/16/2018

Memorandum and Opinion

On October 16, 2018, the court denied CAPPS' motion for a preliminary injunction.

Coverage

Despite Court Rulings, DeVos Leaves Obama-Era Rules Unenforced | Wall Street Journal

Education Secretary Betsy DeVos’s two-year effort to chisel away at the Obama administration’s education agenda has repeatedly been blocked by federal courts. Now, she is trying a different tactic: not enforcing the rules.

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Education Department Has Stalled on Debt Relief for Defrauded Students | New York Times

The Education Department failed to approve a single application for federal student loan relief in the second half of last year, according to new department data that signals that students who claim they were cheated by their colleges cannot count on help from Washington anytime soon.

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Thousands of students who say they were scammed by their schools applied for debt relief — they’re still waiting | MarketWatch

Applications for debt relief from students who say they’ve been scammed by their schools have been languishing at the Department of Education. That’s according to data from the agency requested and published late last week by the office of Senator Patty Murray, the ranking Democrat on the Senate’s Health, Education, Labor and Pension committee, which oversees the Department.

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