Court rules against DeVos in for-profit fraud case

Associated Press

Washington – A federal court has ruled that it was “arbitrary and capricious” for Education Secretary Betsy DeVos to delay an Obama-era rule meant to protect students swindled by for-profit colleges. The decision is a significant blow to the Trump administration’s attempt to ease regulations for the industry.

A judge in the nation’s capital ruled on Wednesday in favor of Democratic attorneys general from 19 states and the District of Columbia and former students. They had sued DeVos over her decision last year to postpone the defense to repayment rules finalized under President Barack Obama.

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DeVos had argued the rules created “a muddled process that’s unfair to students and schools.”

The judge said DeVos’ rationale for freezing the regulation contained a “fundamental and unexplained inconsistency.” He ordered a court hearing on Friday to decide what action to take.

Massachusetts Attorney General Maura Healey, who led the lawsuit, said the ruling was “a victory for every family defrauded by a predatory for-profit school.”

Toby Merill, a litigator at Harvard University’s Project on Predatory Student Lending, which represents defrauded students, hailed the decision as “a huge a rebuke to the department.”

“It’s a really big deal, it’s an incredibly important win for student borrowers and really for anyone who cares about having a government that operates under the rule of law as opposed to as a pawn of industry,” Merill said.

Department spokeswoman Liz Hill said the agency was reviewing the ruling.