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Attorney General Josh Stein Supports Stronger Relief for Student Loan Borrowers

For Immediate Release:
Thursday, October 12, 2023

Nazneen Ahmed (919) 716-0060

The multistate brief urges the Fifth Circuit to uphold the U.S. Department of Education’s student loan discharge authority and other protections for harmed borrowers 

(RALEIGH) Attorney General Josh Stein today urged an appeals court to uphold the Department of Education’s “Borrower Defense Rule.” For-profit colleges have attacked that rule, which can forgive borrower’s federal student loan debt, and sometimes even refund a borrower for past loan payments, if their school victimized them through fraud or abuse. Attorney General Stein and a coalition of 23 Attorneys General filed a friend-of-the-court brief with the U.S. Court of Appeals for the Fifth Circuit in Career Colleges and Schools of Texas v. U.S. Department of Education, et al.

“The borrower defense rule is essential to protecting students from predatory, for-profit colleges that trick students to take out loans without giving them the value of the education they paid for,” said Attorney General Josh Stein. “We need this tool to defend students, and I’m urging the court to uphold these protections against bad actors.”

The brief was filed in support of the U.S. Department of Education in a lawsuit brought in February 2023 by the Career Colleges and Schools of Texas (CCST), an organization representing for-profit colleges and trade schools, which seeks to challenge the Department’s “Borrower Defense Rule.” The rule, among other protections, allows borrowers who experienced certain misconduct on the part of their schools to receive debt forgiveness on their federal student loans.

Attorney General Stein and other attorneys general have a lot of experience investigating widespread and systemic misconduct and wrongdoing by predatory, for-profit institutions that often impact large groups of borrowers. They argue that the rule enables the states to file discharge claims on behalf of groups of affected borrowers instead of on a student-by-student basis. Not only does the rule’s group discharge process better ensure that larger numbers of harmed borrowers are able to access relief, but also acts as a more cost-effective method of recourse than resolving individual claims.

Attorney General Stein is joined by Attorneys General from California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and Wisconsin in filing this brief.

A copy of the brief can be found here.


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