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Attorney General Gurbir Grewal. (Photo: Kevin Sanders for the New Jersey Globe)

State sues over U.S Department of Education rules change

New rule makes it harder for borrowers to obtain loan relief in cases of school malfeasance, attorneys general say

By Nikita Biryukov, July 15 2020 5:38 pm

Attorney General Gurbir Grewal joined a suit seeking to overturn a Department of Education rules change he and 16 other attorney generals say sides with predatory private schools instead of student borrowers.

“We are in the midst of an economic recession prompted by an unprecedented pandemic and people are rightfully reassessing their future plans, including whether or not to borrow money to pursue education to advance their careers,” Grewal said. “Unfortunately, many of them will be duped into taking out student loans to enroll at predatory schools that don’t deliver what’s promised.”

The rule change, adopted in September of last year, increases evidentiary burdens for students, makes it easier for problem schools to dodge class action lawsuits and limits situations that can excuse borrowers of their debt.

The suit claims the rule change was arbitrary and capricious and out of line with the federal Higher Education Act, which requires the Department of Education to provide students with a process for loan relief when schools haven’t kept all their conduct above-board.

“Secretary (Betsy) DeVos adopted a rule that will leave those students on the hook for loans they can’t pay,” Grewal said. “That’s not right, and that’s why we’re filing today’s lawsuit.”

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