Last week, New Jersey Attorney General Gurbir Grewal took the lead in pursing two actions against the U.S. Department of Education related to the Department’s alleged refusals to cooperate with state investigations of student loan servicers and for-profit schools.
On September 16, 2019, New Jersey, along with 16 other attorneys general, including New York, Colorado, Massachusetts, and Washington, sent a letter to the Department opposing a new policy limiting cooperation with state law enforcement. Specifically, the Department announced on August 16, 2019 that it was eliminating routine access to state law enforcement of borrower demographic and other loan level information related to recipients of federal student financial aid. Citing recent federal investigations that have disapproved of the practices of several student loan servicers and for-profit schools, the joint letter argues that the Department’s new restrictions will impede the ability of state law enforcement to investigate potential misconduct.
This is the third letter sent by the New Jersey attorney general to the Department related to similar changes. Earlier joint letters were sent on July 13, 2018 and April 4, 2019 in response to the Department’s elimination of its policies for the disclosure of consumer compliance for use by law enforcement agencies and the Department’s rejection of state law enforcement agencies’ requests for student loan information.
Further evidencing Attorney General Grewal’s mounting frustration, New Jersey filed suit against the Department in the United States District Court for the District of New Jersey on September 17, 2019. The Complaint seeks declaratory and injunctive relief for alleged violations of the Freedom of Information Act for the Department’s alleged failure to respond to the AG’s August 27, 2018 FOIA request seeking information about the Department’s new policies of “stonewalling” state law enforcement. The Complaint accuses the Department of recently adopting a “pattern and practice of shutting down cooperation and information sharing with state law enforcement agencies” in connection with states’ efforts to protect “student borrowers from fraudulent and predatory practices” by student loan servicers and for-profit schools. The Complaint requests that the Department be ordered to produce the requested information regarding its policy changes and an award of its attorney’s fees.