Attorney General Tong Supports Protection of Student Borrowers

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Attorney General William Tong

08/02/2021

Attorney General Tong Supports Protection of Student Borrowers

(Hartford, CT) – Attorney General William Tong has joined an intergovernmental agreement to protect the rights of borrowers of federal student loans. The memo, which was filed with the US Court of Appeals for the Second Circuit, supports a New York Legal Assistance Group (NYLAG) lawsuit challenging the Trump administration’s ED actions that illegally overturned and replaced federal “borrower protection.” ” regulations.

Borrower Protection is the process by which students can seek waiver from their federal student loans when they are defrauded by their school. The Trump administration has scrapped previous borrower protection rules that significantly protected students from fraud, with new rules that favor predatory commercial schools and nearly close doors for students seeking debt relief. In its lawsuit, NYLAG, a legal aid organization represented by the Predatory Student Loan and Civil Litigation Project, argues that the 2019 Borrower Protection Rule passed by the Trump administration is arbitrary and capricious and should be scrapped. Attorney General Tong is pursuing the same in a multi-state coalition in a lawsuit in the Northern District of California.

“This Trump-era rule has deprived student borrowers of the protection from predatory schools by making fun of the consumer protection program approved by Congress. The Trump administration’s rule has made it functionally impossible for defrauded students to obtain exemption from federal student loans. Student loan debt is a major disincentive for millions of Americans, especially those who drop out of false programs without meaningful degrees or skills. Facing a dual crisis of predatory providers of worthless degrees and huge student debt is one of the most important things we can do to kickstart our economies and give families a chance for financial security. ” said Attorney General Tong.

Federal Higher Education Act requires the US Secretary of Education to issue “borrower protection” rules that provide students with the ability to repay federal student loan debt if they are victimized by the school. In 2016, the Obama administration’s Department of Education created strong defenses for student borrowers who were duped by predatory commercial colleges by establishing a fair and transparent borrower protection process for writing off student loan debt. Following the change of presidential administration in 2019, ED canceled these rules and replaced them with new rules designed to prevent defrauded students from obtaining loan compensation and to protect predatory schools from being prosecuted for their misconduct.

The amicus help supports the NYLAG’s argument that the 2019 Trump administration’s borrower protection rules are arbitrary and capricious and should therefore be repealed. He also supports NYLAG’s claims that ED relied, among other things, on inaccurate, unconfirmed and inconsistent assumptions in repealing and replacing the 2016 Borrower Protection Rule.

In filing a Statement of Understanding, Attorney General Tong joins the Attorneys General of California, Massachusetts, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode -Ilanda. , Vermont, Virginia, Washington, Wisconsin and the District of Columbia.

A copy of the brief is available here

Assistant Attorney General John Langmaid and Deputy Associate Attorney General Joe Chambers, Chief of the Financial and Tax Services Section, assisted the Attorney General in this matter.

Twitter: @AGWilliamTong
Facebook: Attorney General CT

Media Contact:

Elizabeth Benton
elizabeth.benton@ct.gov

Consumer inquiries:

860-808-5318
attorney.general@ct.gov



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