Federal regulations that aim to protect and refund student loan borrowers defrauded by their schools could end before they even go into place, thanks to a lawsuit filed by the for-profit college industry.
The California Association of Private Postsecondary Schools, a trade group representing for-profit and private colleges in the state, filed a lawsuit [PDF] against the Department of Education and Secretary Betsy DeVos this week seeking a court order to stop the planned July 1 implementation of so-called Borrower Defense rules.
The lawsuit, filed with a federal court in Washington, D.C., claims that these rules could lead to more closures of vocational schools, leaving students with fewer choices when seeking higher education.
According to the lawsuit, the Dept. of Education lacks the legal authority to uphold the “arbitrary and capricious” rules.
“The Final Rule threatens the existence of many CAPPS member institutions,” the lawsuit states. “The increased costs and the dramatically escalated threat of meritless claims and litigation, both before the Department and in court, will be crippling for many schools.”