New Mexico Joins Fight To Protect Defrauded Students

SANTA FE, NM – New Mexico has joined a coalition of states fighting new rules from the U.S. Department of Education (USDE) that would strip protections for students who have been defrauded by “predatory” for-profit schools.

State Attorney General Hector Balderas joined a coalition of states in supporting Congressional efforts to reject a new rule from USDE that would fail to protect students and taxpayers from the misconduct of those unscrupulous schools.

In a letter to Congress, the attorneys general supported efforts to reject USDE’s 2019 Borrower Defense Rule by passing a resolution of disapproval under the Congressional Review Act.

“New Mexican students trying to make a better life for themselves and their families should never be the victim of predatory lending, and this attempt to strip them of the protections they need is unacceptable,” said Attorney General Balderas. “The safety and welfare of our students is our priority, and we will continue to fight to protect them.”

According to the letter, the USDE rule provides no realistic prospect for student borrowers to discharge their loans in cases where they’ve been defrauded by predatory for-profit schools, and it eliminates the financial responsibility requirements those schools are currently held to. “If this rule goes into effect, the result will be disastrous for students while providing a windfall to abusive schools,” the letter states.

The 2016 Borrower Defense Rule provided defrauded borrowers with a transparent process to seek debt relief and protected taxpayers by holding schools accountable that engage in misconduct. However the Department’s new rule would rescind and replace that 2016 law.

Instead, the letter contends that USDE’s new rule would provide an unworkable process for defrauded students to obtain loan relief and will do nothing to deter schools that cheat their students, nor does it offer a mechanism to hold those schools accountable.

Further, the attorneys general insist that instead of ensuring that borrowers aren’t bearing the costs of institutional misconduct, the new rule gives more power to predatory for-profit schools and denies relief to the students they’re claimed to have victimized.

Attorney General Balderas was joined in sending the letter by the attorneys general of California, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, Virginia, Washington, and the District of Columbia.

A copy of the full letter can be viewed at: https://www.nmag.gov/uploads/PressRelease/48737699ae174b30ac51a7eb286e661f/AG_Balderas_Supports_Congressional_Effort_to_Reject_U.S._Department.pdf