Last month, the Education Department decided to freeze rules put in place by the Obama Administration that were meant to erase the student loan debts of students who had been defrauded by sketchy colleges. The rules were supposed to take effect on July 1.

But in May, a California association of for-profit schools filed a lawsuit in an attempt to block the new rules. Citing the lawsuit, Secretary of Education Betsy DeVos put the rules on hold. Now 18 states and the District of Columbia are suing DeVos and the department. Maura Healey, the Massachusetts attorney general who led the states’ effort, said:

Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans. Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law.

DeVos called the so-called borrower defense rules “muddled” and “unfair to students.” But on Thursday, two students who have borrowed money for studies sued the Education Department over the same issue. They had both attended the for-profit New England Institute of Art in Massachusetts, which was the target of a federal lawsuit in 2015.

MA is challenging Betsy DeVos’s illegal attempt to protect fly-by-night schools that cheat students & bury them in mountains of debt.

— Elizabeth Warren (@SenWarren) July 6, 2017

There is already a federal law in place that allows students to apply for loan forgiveness if they think they have been a victim of fraud, but the Borrower Defense to Repayment rule would facilitate and streamline the process. It was created when a massive number of students applied after some major for-profit education companies were shut down or filed for bankruptcy a few years ago.

More than 15,000 claims were filed after the Corinthian Colleges collapse alone, by students owing over $247 million. As of now, taxpayers have to foot that bill. The Obama-era regulations that DeVos froze would have required the schools that defrauded students to take responsibility. It would also forbid schools from implementing mandatory arbitration contracts that prohibit students from taking legal action against the schools.

Critics of the borrower defense rule said it’s too hard on individual schools. The association that filed the lawsuit in May, the California Association of Private Postsecondary Schools, said that the rule “threatens the existence” of some of the private schools.

But these schools deceived students by exaggerating job placement statistics; in one case, a school claimed that 100 percent of its students found a job in their field after graduating. The real number was 0 percent, the Education Department found in 2015. Other times, the schools closed unexpectedly and left the students without degrees but with massive debt.

The students that filed a lawsuit on Thursday said they already applied to have their loans written off under the older procedures. But at this point their cases have been pending for two years.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post Eighteen States Sue Betsy DeVos for Blocking Student Loan Protection Rules appeared first on Law Street.

Welcome to RantCrush Top 5, where we take you through today’s top five controversial stories in the world of law and policy. Who’s ranting and raving right now? Check it out below:

Jessica Alba Thinks Honest Company Lawsuits are NBD

Jessica Alba’s Honest Company, which produces home and personal care items like detergent and soap has been under fire for…well, for being not that honest. But during an interview with the “Today” show yesterday, Alba explained she’s not too worried about the suits, saying:

If an organization wants to bring awareness to their cause, I’m an easy target and our brand is an easy target obviously, because I get a different kind of attention than other brands would. We stand by our ingredients, the effectiveness of the products and we’re pretty optimistic that we’re going to win every case.

via GIPHY

Rant Crush

RantCrush collects the top trending topics in the law and policy world each day just for you.

The post RantCrush Top 5: August 26, 2016 appeared first on Law Street.

ITT Educational Services–the company that operates ITT Technical Institute–is the latest for-profit education company to be sued for misleading its students. A new lawsuit has been filed by Massachusetts Attorney General Maura Healey, claiming that the company used deceptive information about employment rates post-graduation, as well as about some of the aspects of its computer science program. Additionally, the for-profit education company is under federal investigation based on suspicions it may have defrauded the federal government.

According to Boston.com, when it came to the Computer Network Systems program:

ITT’s admissions representatives allegedly told prospective students that anywhere from 80 percent to 100 percent of graduates obtained jobs in or related to their field of study, but real placement rates were actually 50 percent or less, according to the suit.

The suit argues that when ITT categorized jobs as “in or related to their field of study” it included positions like working customer service at a big-box retailer, internships or short-term positions involving computers, and working for an airline checking passengers in for flights. Essentially, if someone used a computer for their job (which is pretty much everyone in this day and age) they were counted as employed under ITT’s metric.

The lawsuit also claims that ITT didn’t provide the kind of in-classroom education that it advertised; the accompanying press release stated:

ITT also advertised and promoted hands-on training and personalized attention through its program, but students said their experience involved the use of outdated technology, absent teachers, or being told to ‘Google’ the answers to questions.

This certainly isn’t the first time that ITT has had its day in court. ITT, and in some cases its top officials, have been sued by the Securities Exchange Commission, the Consumer Financial Protection Bureau, the Attorney General of New Mexico, and has gotten into multiple scuffles with shareholders. Its stock has fallen, and its reputation is presumably taking a hit as more controversies continue to pile up.

However, ITT has promised to fight Massachusetts on these particular allegations. Yesterday the company released a statement claiming that the lawsuit was just an example of: “Massachusetts’ woeful record of hostility toward career colleges that train non-traditional and underserved students.”

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post The Fight Against For-Profit Schools: ITT Sued by Massachusetts Attorney General appeared first on Law Street.

Students affected by one of the largest educational scams in modern years are finally getting some relief. The U.S. Department of Education (DOE) says it will forgive students’ federal student loans on the grounds that Corinthian Colleges Inc. defrauded them after the company’s bankruptcy earlier this year.

A string of reports and lawsuits, including one by California Attorney General Kamala Harris, led to Corinthian’s end. The for-profit school used tactics that enticed students, many with limited education and money, with promises of workplace skills ranging from video game design to nursing. Students left these colleges with nearly worthless degrees and very little knowledge in their fields.

Before its closure, the two decade-old company was one of the biggest for-profit education companies in the United States, operating more than 100 campuses at one point under various names, including Everest, Wyotech, and Heald. Corinthian had campuses throughout North America and Canada. It ceased operations this April, shutting down campuses and selling off others after the Department of Education cut off its loan lifeline and fined Corinthian $30 million for misrepresenting job placement rates. The ending was tragic for many–thousands of students were given a one-day notice when campuses closed, leaving them to wonder if their hard work and credits could be transferred to other institutions to complete their education.

This is a very sensible decision by the DOE that will help thousands of students who were struggling to pay back these loans. But although this may give many students a fresh start, consumer and education groups worry that this loan forgiveness process will be too tedious for most to complete. Students have to individually apply for the loan relief. This process requires legal savvy and documents–including transcripts–that could be difficult to obtain, especially considering that the schools are no longer operating. It is also important for those who apply to know that the relief is only applicable to federal student loans, not the private loans which countless students were reportedly lured into getting. Finance blogger, Alexis Goldstein, criticized the plan stating:

Instead of providing broad debt cancellation to former students of Corinthian Colleges, Inc. the Department decided to require students to jump through extensive loopholes in order to apply for relief.

Although this may give the impression that the Corinthian problem is solved, it is only the beginning. Because federal regulators let the operation run too long, the lost loans may total up to $3.5 billion in taxpayer money.

We’re going to do everything we can to help #CorinthianCollege students, while also protecting taxpayers. http://t.co/FhePt7hD6c

— Arne Duncan (@arneduncan) June 8, 2015

A Huffington Post analysis recently found that nearly half of the schools listed by the Department of Education as “Alternative Education Options” are for-profit institutions owned by corporations that are also under federal investigation for possibly misleading students. The Obama administration is already guaranteeing forgiveness to the 40,000 students who borrowed hundreds of millions in federal loans to enroll at Heald from 2010 on. Forgiving the loans is a great step for the thousands of hard-hit students, but it should also make the government much more watchful of the educational marketplace.

Taelor Bentley

Taelor is a member of the Hampton University Class of 2017 and was a Law Street Media Fellow for the Summer of 2015. Contact Taelor at staff@LawStreetMedia.com.

The post For-Profit College Scam Victims Get Loan Forgiveness: Will it Be Enough? appeared first on Law Street.

Unfortunately, it seems as though another law school is feeling the effects of the declining enrollment facing law schools across the country in recent years. George Kosko and Robert Carr, the owners of Charleston School of Law located in South Carolina, have recently announced that they might not enroll a new class of students this coming fall. The statement they put out read:

We cannot in good faith enroll another class when, like last year, the school is spending more money than is coming in; when we cannot assure the students that they will be able to use federal student loans for their full three years; and when we cannot be sure the school will be able to maintain its license and stay open

While this was not a formal announcement of closure, it does not look promising that the school is going to be able to turn things around.

Understandably, many of the students were shocked and confused by this news. The announcement came during the thick of finals season, a bizarre time to announce something that could rattle and greatly affect the futures of the school’s current students. Many students expressed that they were in disbelief that the administration would announce something of this magnitude during finals.

Other students expressed disappointment. Second-year law student Drew Waxler believed that he would finish his three years at Charleston School of Law and then head back home to Burlington, Vermont to start his career. However, it appears that his plans may have to change. He says that, “it is discouraging that you won’t have an alma mater to take pride in after graduation if they do decide to stop taking” new classes of students.

While many of the students were shocked by the news, the school has actually been in trouble since 2013 when its owners announced that a sale to the education company Infilaw was under consideration. At the time, many students and faculty members expressed their outrage with the sale. They explained how the three schools currently under Infilaw are of a lower caliber than Charleston. If the school were to become an Infilaw school, it would decrease the value of a Charleston Law degree. To the relief of many, the sale didn’t go through. However, it appears as though the process has done lasting damage to the school.

So, what does this mean for the students? According to the American Bar Association and state rules, a law school is not allowed to simply close its doors without doing anything for its students. If they decide to close, they will have to submit a “teach-out” plan that details how current students will finish their education programs. So, while certainly not ideal, at least the students can know that they won’t be left to figure things out for themselves.

The owners have stated that they expect to release a formal announcement at some point this week.

Brittany Alzfan

Brittany Alzfan is a student at the George Washington University majoring in Criminal Justice. She was a member of Law Street’s founding Law School Rankings team during the summer of 2014. Contact Brittany at staff@LawStreetMedia.com.

The post Will This Law School Shut Down for Good? appeared first on Law Street.