Obama-era Student Loan Protections Upheld By Federal Court

October 26, 2018

Do you like your student loan protections? Well, you're not a loan, as a federal court ruled to uphold student loan protections introduced by President Barack Obama. On Oct. 16, U.S. District Judge Randolph Moss allowed the regulations to take effect, allowing students defrauded by for-profit colleges to more easily pursue charges through the court system.


For-profit colleges have opposed the regulations since President Obama introduced them after the collapse of for-profit ITT and Corinthian Colleges. The coalition of for-profit colleges, backed by current Education Secretary Betsy DeVos, claimed that the regulations were unfair and hurt colleges, businesses and taxpayers.


While the regulations have now officially gone into effect, Moss, an Obama appointee, did not rule that the Department of Education has to enforce them. DeVos has not yet released information on how the regulations will be enforced, and CEOs of for-profit colleges have been publicly encouraging her to not enforce the rules thoroughly. Steve Gunderson, CEO of Career Education Colleges and Universities, told POLITICO, “There are many examples of both the Obama Administration, and the Bush Administration before that, choosing not to implement or enforce rules of the previous administration because they do not agree with such rules…The Trump Administration should have the same authority to do so.”


DeVos's office accepted the court’s decision, releasing a statement later that day saying that she “respects the role of the court and accepts the court’s decision not to preliminarily enjoin the 2016 borrower defense regulation.” Yet the ruling marks a significant setback in her deregulatory policy agenda, along with an announcement that the Department of Education will not meet a critical Nov. 1 deadline. Missing the deadline could mean that additional deregulation of the for-profit college industry may not occur until the summer of 2020 according to Business Insider.


The Century Foundation, a left-leaning think tank, reported that tens of thousands of students across the United States will now automatically be eligible for debt relief. While Secretary DeVos has prioritized the colleges and taxpayers, some say that she has not paid enough attention to the needs of students. Kate Fulton-John (‘21), stated, “Students who pay money to colleges should expect to get their education. It’s an expensive thing to have to pay for, if a college goes under then yes the student SHOULD get their money back.”


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