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Judge allows Obama-era student loan protections to take effect

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A federal judge ruled Tuesday to put Obama-era protections for students defrauded by colleges into effect immediately despite challenges by the Trump administration and an association of for-profit colleges.

Judge Randolph D. Moss denied the California Association of Private Postsecondary Schools' request to delay the implementation of the Borrower Defense to Repayment rule, which establishes a process for students who have been defrauded by for-profit schools and other entities to have their federal student loans canceled.

Moss ruled the association failed to show it would suffer irreparable harm if the rule took effect, although the case was allowed to proceed with the rule in place.

"This is not the first (and presumably not the last) chapter in a dispute about the fate of regulations that the Department of Education promulgated in November 2016 to address perceived deficiencies in the William D. Ford Federal Direct Loan Program," Moss wrote.

Last month, Moss ruled against Education Secretary Betsy DeVos in a lawsuit brought forth by 19 states that accused her department of delaying the implementation of the rules, stating her delay tactics were "arbitrary and capricious."

As a result of Tuesday's ruling DeVos will be tasked with implementing the protections, but spokeswoman Elizabeth Hill said the education secretary still plans to rewrite the regulations.

"Regardless of what the court decides, many provisions of the 2016 regulations are bad policy, and the department will continue the work of finalizing a new rule that protects both borrowers and taxpayers," she said.

Julie Murray, an attorney who represented the students in the lawsuit against the Education Department, hailed Tuesday's ruling as "a huge win for defrauded borrowers around the country."

"The rule is finally in effect. No more excuses. No more delays. Industry will continue to challenge the rule in court, but we will work as long as it takes to defeat those corporate interests and an administration beholden to them," Murray said.
 

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