Betsy DeVos, U.S. secretary of education. Photographer: Andrew Harrer/Bloomberg

Arguing it's a "gross injustice" for the Trump administration to repeal an Obama-era rule giving student borrowers a robust defense to repaying loans owed to "predatory" for-profit schools, state Attorney General Letitia James on Wednesday joined other state attorneys general in suing to stop the repeal.

In a 56-page lawsuit, the coalition of 23 states contend that U.S. Department of Education Secretary Betsy DeVos' 2019 repeal and replacement of the rule "drastically" limits repayment defenses for borrowers who find themselves saddled with large amounts of debt after a for-profit school has acted unfairly or deceptively in getting the student to enroll or attend the institution.

DeVos' new regulations, which replaced the Obama administration's 2016-issued "Borrower Defense to Repayment" rule, "for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans," states the complaint. The lawsuit, which names DeVos and the education department as defendants, was lodged Wednesday in the U.S. District Court for the Northern District of California by a coalition led by attorneys general from Massachusetts and California. All 23 of the states that are plaintiffs in the suit are led by Democratic governors.

Responding to the lawsuit, Education Department press secretary Angela Morabito said in an email, "This is yet another grandstanding, politically driven lawsuit meant to grab a cheap headline, and the media seems to always oblige. To any objective observer, our borrower defense rule clearly protects students from fraud, ensures they are entitled to financial relief if they suffered harm and holds schools accountable."

The coalition's complaint also alleges that the 2019 replacement regulations "eliminated all available defenses [for for-profit school student borrowers holding loans], except just one: 'a misrepresentation … of material fact [by an institution] upon which the borrower reasonably relied in deciding to obtain' a federal student loan."

And "even after drastically limiting available defenses" for student borrowers who have been misled or deceived by a for-profit institution, the complaint argues, DeVos' education department also "imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully."

"Amongst other arbitrary impediments," continues the complaint, "the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth.

"A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake," says the complaint.

James on Wednesday, in a news release about the lawsuit, said that DeVos' repeal of the Obama administration's "critical protections" laid out in the "Borrower Defense to Repayment" rule "is just the latest in the long list of actions the Trump Administration has taken to prioritize profits for predatory schools over the success of our students."

The education department's replacement rule "does nothing more than prevent borrowers from obtaining the relief they need, which is why our coalition is fighting this gross injustice and demanding that the Department of Education and Secretary DeVos, for once, stop placing students in harm's way," added James.

"Students have a right to a fair, consistent, and transparent process of seeking debt relief, and predatory businesses and institutions have an obligation to bear the cost of their misconduct," she also said.

In the complaint, the coalition of state plaintiffs also contends that the "2019 Rule brims with ill-disguised contempt for struggling students, castigating them as irresponsible, prone to making frivolous claims on pretextual grounds, when the supposedly true source of their financial difficulties are their own poor career decisions." The states further argue that "the true intended beneficiary of the 2019 Rule is the for-profit school industry."

The lawsuit brings two causes of action, both of which cite the federal Administrative Procedure Act. One contends that DeVos' actions in regard to the rule repeal are arbitrary, capricious, and an abuse of discretion, while the other argues in part that her actions are "not in Accordance with Law and are in Excess of Statutory Jurisdiction, Authority, or Limitations."