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Department of Education’s Proposed New Borrower Defense Rule Enables Predatory For-Profit Colleges and Harms Students

Yesterday, the Department of Education proposed a new borrower defense rule that strips away borrower rights, encourages the predatory behaviors of bad actors in higher education, and once again, benefits the for-profit college industry instead of students.

This proposed rule is a clear attempt to stop cheated students from asserting their legal rights. It encourages abusive and predatory institutions to continue to rip off students with impunity, while slamming the door on the debt relief that Congress has instructed the Department to provide to cheated students.

The Department’s proposal reflects its unfounded belief that the interests of institutions, taxpayers, and borrowers are opposed to one another. In fact, when institutions are not trying to profit off of federal student aid, those groups have shared interests. Instead of punishing students for supposed failures of personal accountability, the Department ought to look in the mirror. The Department alone has the power and ability to prevent predatory actors from cheating students and stealing taxpayer money.

The Project on Predatory Student Lending is the leading legal advocate for students cheated by for-profit colleges. In ITT’s bankruptcy in Indianapolis, the Project represents 750,000 former ITT students whose claims the Department has largely ignored. In a California federal court, the Project stopped the Department from using its illegal “partial denial” rule, which limited the relief for Corinthian students with approved borrower defense claims. And in D.C., the Project has challenged the Department’s illegal delay of the 2016 borrower defense regulations.