DeVos Sued Over Plans to End Protections for Student Borrowers

(Bloomberg) -- U.S. Education Secretary Betsy DeVos was sued for the second time by a coalition of states fighting her department’s plan to end an Obama-era rule meant to protect student loan borrowers.

Led by Maryland Attorney General Brian Frosh, a Democrat, attorneys general from 17 states and the District of Columbia on Tuesday asked a U.S. court in Washington to overturn the Department of Education decision to delay and decline to enforce part of the Gainful Employment Rule. The department has said it is crafting a replacement.

Enacted in 2014, the measure requires for-profit and other educational institutions that rely upon federal aid for the bulk of their revenue to meet standards showing their programs prepare students for gainful employment and the ability to pay their loans.

DeVos’s move, without first navigating the regulatory repeal process, violates the federal Administrative Procedure Act, according to the suing AGs. The same coalition is challenging DeVos’s earlier decision to delay implementation of rules meant to shield student loan borrowers from schools’ predatory conduct.

To contact the reporter on this story: Andrew Harris in Washington at aharris16@bloomberg.net.

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Paul Cox