18 states sue U.S. Education Department over student loan relief

U.S. President, Donald Trump
U.S. President, Donald Trump

More than one-third of U.S. states on Thursday sued the U.S. Education Department and its Secretary, Betsy DeVos, over recent decision to suspend rules intended to speedily cancel student-loan debt of people defrauded by for-profit Corinthian Colleges Inc and others.

DeVos suspended the rules on June 15 due to take effect on July 1, saying they needed to be reset.

Massachusetts, 17 other states and the District of Columbia said in a filing in U.S. district court in Washington, that the department broke federal law in announcing the delay without any public engagement process.

DeVos, a Republican and advocate of public-private partnerships in education, said she wanted to suspend the rule that accelerated the existing debt cancellation process because the steps were muddled.

She added that “the rule also puts taxpayers on the hook for significant costs.”

The rules were finalised in the last days of the administration of President Barack Obama, a Democrat who overhauled federal student lending.

The attorneys-general for California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maryland, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington also signed onto the suit.

Consumer groups – Public Citizen and Project on Predatory Student Lending sued separately on Thursday to lift the delay.

(Reuters/NAN)


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