AG Grewal Sues U.S. Department of Education over New Limits on Protections for Student Loan Borrowers

TRENTON – Attorney General Gurbir S. Grewal today joined a coalition of Attorneys General in suing the U.S. Department of Education over changes to its “borrower defense” rule that will limit financial protections for student loan borrowers. The lawsuit also names U.S. Secretary of Education Betsy DeVos as a defendant.

Adopted in September 2019, the challenged rule makes it harder for students to dispute their obligations to make student loan payments based on wrong-doing by their postsecondary schools. Among other things, the rule limits the types of institutional misconduct that can excuse borrowers from paying their loans; places unnecessary procedural and evidentiary burdens on students seeking relief; eliminates automatic discharges for students at schools that close down; and makes it easier for schools to avoid class actions by students.

Earlier this year, Congress passed a joint resolution to reverse the Department of Education’s changes to the borrower defense rule, but President Trump vetoed the bipartisan joint resolution in May. Although every member of New Jersey’s congressional delegation voted against the rule, Congress was unable to override President Trump’s veto.

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