Project on Predatory Student Lending Statement on Order in NYLAG v. DeVos | Blog

March 19, 2021

CATEGORIES

NYLAG v Cardona


On Wednesday (March 17th) a judge ruled on the challenge to the DeVos borrower defense rule in the case NYLAG v. DeVos. We argued that many different parts of the rule are unlawful and illogical. The judge agreed that the three-year statute of limitations on defensive claims was illegal, and sent that part back to the Department. But the judge upheld the other provisions. We are disappointed and are considering our next steps.

These DeVos borrower defense regulations are built on the idea that borrower defense is a grab at “free money,” and that the system should be built to protect predatory schools from students’ claims for relief, instead of protecting borrowers from unscrupulous for-profit colleges. The rules are intended to, and do, make it impossible for defrauded borrowers to get relief. This approach has shone through, not only in these regulations but also in the way that the Department has been ignoring and then mass-denying borrower defense claims. The DeVos borrower defense rules affect the process for all borrower defense applicants, and dictate the standard for loan relief for loans borrowed on or after July 1, 2020.

The Department must act quickly to remedy the harms done by its mangled approach to borrower defense, including by adopting rules and policies that side with students instead of predatory companies.