“Now is a Time for More Scrutiny, Not Less” | Press Release

March 19, 2019

Statement From Project on Predatory Student Lending On The Department of Education’s Announcement That It Will Implement 2016 Borrower Defense Regulations

 

JAMAICA PLAIN – On Friday, the Department of Education announced that it would finally implement the 2016 borrower defense regulations designed to better protect student borrowers from predatory schools. The Department attempted to delay the implementation of these rules – including stopping schools that take federal student aid money from forcing students’ claims out of court and into arbitration and protecting students’ rights to bring class action claims against schools – but those delays were ruled illegal in the landmark case Bauer v. DeVos.

The Bauer case was brought by the Project on Predatory Student Lending and Public Citizen in 2017 on behalf of two former students of the New England Institute of Art, which was owned by Education Management Corporation (EDMC). Because the students won their case, the 2016 borrower defense rule took effect on October 16, 2018. In addition to protecting borrowers’ rights to bring their claims in court, the rule’s implementation also directly resulted in the cancellation of $150 million in debt for 15,000 students whose for-profit schools had closed while they attended.

The following is a statement from Project on Predatory Student Lending Director Toby Merrill on the Education Department’s announcement that it will finally begin implementing these rules.

“It’s important to remember that the Department did not choose to implement these critical student protections; these actions are required as a result of students’ court victory in the Bauer case. We should now be highly skeptical of whether and how the Department will enforce these rules. We urge Secretary DeVos and the Department to answer basic questions about what mechanisms are in place to monitor schools’ compliance and what it will do if schools continue to compel students to arbitration. Now is the time for more scrutiny of the Department’s actions, not less.”

 

For more information on the Bauer case, please visit here.

 

About the Project on Predatory Student Lending

Established in 2012, the Project on Predatory Student Lending represents former students of predatory for-profit colleges. Its mission is to litigate to make it legally and financially impossible for federally-funded predatory schools to cheat students.

The Project has brought a wide variety of cases on behalf of former students of for-profit colleges. It has sued the federal Department of Education for its failures to meet its legal obligation to police this industry and stop the perpetration and collection of fraudulent student loan debt.

 

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