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In Court Filings, Lawyers’ Committee for Civil Rights Under Law Calls For Department Of Education To Restore Protections For Students Against Predatory Lenders In For-Profit Industry

For Immediate Release October 4, 2017

WASHINGTON, D.C. – The D.C. District Court accepted a pair of amicus briefs filed by the Lawyers’ Committee for Civil Rights Under Law and Weil, Gotshal & Manges LLP this week in two lawsuits challenging the Department of Education’s decision to delay implementation of rules to protect student loan borrowers from misrepresentations, fraud, and abuse.

The briefs filed in Commonwealth of Massachusetts v. Department of Education and Bauer v. Department of Education highlight the disproportionate impact the for-profit college industry has on African-American and Latino students and the unique vulnerabilities these students face because of the Department’s decision to delay enforcement of the Borrower Defense Rule aimed to protect them.

“Equal educational opportunity is central to the struggle to achieve equality for all Americans,” said Kristen Clarke, President and Executive Director of the Lawyers’ Committee for Civil Rights Under Law.  “By delaying implementation of a rule designed to combat predatory lending, the Department of Education has betrayed its obligation to protect students from fraud.  States are stepping up to protect lower-income and minority students from exploitation, and we are proud to support those efforts in our amicus briefs.”

Nearly all African American and Latino students who attend for-profit schools borrow money to do so, and they borrow at least $10,000 more than their peers at public or non-profit colleges.  In addition to carrying more student loan debt, students graduating from for-profit schools have a harder time getting jobs and earn less, contributing to the frequent inability to repay loans or see a return on their investment.

Attorneys General for 18 states and the District of Columbia filed Massachusetts et al. v. Department of Education, to challenge United States Department of Education and Secretary of Education Betsy DeVos’s decision to delay implementation of the Borrower Defense Rule.  Two student borrowers filed similar claims in Bauer v. Department of Education.  This rule, approved in November 2016, established strong protections for students victimized by the predatory practices of for-profit institutions who prioritized profits over learning.  It required schools receiving federal funding to make public defaults on repayment, banned the use of mandatory arbitration clauses in enrollment agreements, and created the ability for the Department to discharge loan debt to classes of defrauded students.  Two weeks before the rule was slated to take effect, DeVos announced she was delaying implementation indefinitely.

Over the past two decades, the growth of for-profit colleges has turned education into a massive financial business that benefits shareholders more than students.  For-profit colleges represent a rapidly growing industry in the United States, with enrollment increasing 223 percent between 2000 and 2012.  This growth is facilitated by the huge investments made by for-profit schools in marketing and recruiting.  A 2012 Senate report found that for-profit colleges dedicated only 17.2 percent of revenue on instruction, spent more on marketing, admissions, and recruiting, and allocated more to profit. This marketing and recruiting is often targeted specifically at non-traditional students, often women, students of color, veterans, or single parents, who may believe the for-profit model is their only option.

A link to the briefs can be found here.

 

About the Lawyers’ Committee for Civil Rights Under Law:

The Lawyers’ Committee for Civil Rights Under Law, a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination.  Now in its 54th year, the Lawyers’ Committee for Civil Rights Under Law is continuing its quest “Move America Toward Justice.”  The principal mission of the Lawyers’ Committee for Civil Rights Under Law is to secure, through the rule of law, equal justice for all, particularly in the areas of criminal justice, fair housing and community development, economic justice, educational opportunities, and voting rights.

Contact:

Derrick Robinson

Drobinson@lawyerscommittee.org

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