SACRAMENTO, June 14, 2017 – California Attorney General Xavier Becerra is taking action to protect students defrauded by for-profit colleges and universities and to prevent other students from facing similar circumstances. Attorney General Becerra and eight attorneys general filed a motion to intervene in a lawsuit to defend key new rules aimed at protecting students from deceptive practices and fraud.
The U.S. Department of Education’s (ED) Borrower Defense Regulations are set to take effect on July 1. The California Association of Private Postsecondary Schools (CAPPS), a trade group that represents for-profit colleges and universities, sued ED in an attempt to block the Borrower Defense Regulations from taking effect. Under the Trump Administration, ED has failed to hold for-profit colleges accountable.
“As the founder of the failed Trump University, President Trump knows well how some shady for-profit colleges and universities award useless degrees and prey on students’ and taxpayer’s money,” said Attorney General Becerra. “If Secretary DeVos and the Trump Administration won’t protect students, then I will. No student should have to worry about predatory schools destroying his or her future. These new rules would help to protect them.”
The California Attorney General’s Office led the charge against California-based Corinthian Colleges for targeting low-income, vulnerable individuals through false advertisements that misrepresented job placement rates and the value of school programs. The Attorney General’s Office was awarded a $1.1 billion judgement from Corinthian on March 26, 2016.
Subsequently, the Attorney General’s Office worked with the Obama Administration’s Department of Education as the primary negotiator representing the interests of the state attorneys general to enact new regulations and improve the loan forgiveness process for students defrauded by their schools. These regulations, known as the Borrower Defense Regulations, are scheduled to go into effect on July 1 and incorporate many of the provisions advocated by the Attorney General’s Office, including:
- Automatically cancel eligible loans for students who were defrauded;
- Take greater steps to ensure a school’s financial viability; and
- Ban schools from including or enforcing certain arbitration provisions or class-action waivers in their enrollment agreements.
The motion to intervene was filed in the U.S. District Court for the District of Columbia. California was joined by the Attorneys General of Massachusetts, Illinois, Iowa, Maryland, New York, Oregon, Pennsylvania, and the District of Columbia.