New Jersey Attorney General Gurbir Grewal (photo by David Handschuh/NYLJ)

New Jersey's attorney general filed suit in federal court on Tuesday against the U.S. Department of Education, and joined 19 other states in calling on the department to back off from what they describe as a pattern of limiting access to vital student loan information.

"Recent actions by the U.S. Department of Education demonstrate that its current leadership is more committed to shielding student loan servicers and predatory schools from scrutiny than it is committed to protecting students from misconduct," Gurbir Grewal said in a release from his office on Tuesday announcing the filing of the complaint.

Grewal said the lawsuit is one of two steps the state is taking. The day before, New Jersey  joined attorneys general of Colorado, Washington, California, Connecticut, the District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, and Virginia in a letter Monday addressed to U.S. Department of Education Secretary Betsy DeVos.

The attorneys general are asking DeVos and her department to refrain from hindering routine disclosure of student loan information to state law enforcement agencies, data they claim is useful in combating fraud in the student loan industry.

"The Department's new restrictions on state law enforcement agencies' access to data impede our ability to investigate potential servicer misconduct and protect borrowers in our respective states," said the letter signed by the 20 attorneys general. "At a time when the Department's own watchdogs are sounding the alarm, the Department's actions to hamper law enforcement efforts are profoundly disturbing. The Department's action pattern suggests a systematic dismantling of the long-standing cooperative relationship between the Department and state law enforcement officials."

Alberto Betancourt, a press officer at the U.S. Department of Education, responded in an email on Thursday that the department has been faithfully administering the complex student loan program designed by Congress, known as the Public Service Loan Forgiveness (PSLF) program.

Betancourt said complexities in the PSLF program include restrictions on the types of eligible loans and no authority to require borrowers to annually report their participation in the program.

He said among the ways the department is trying to simplify the program is by creating the PSLF Help Tool, which helps borrowers assess whether their loans and employers qualify for PSLF and allows them to generate the right forms to take to their employer to sign and submit. The department has also increased its outreach to borrowers about PSLF, according to Betancourt.

The 14-page complaint filed Tuesday in U.S. District Court for the District of New Jersey brings claims under the Freedom of Information Act "to compel the United States Department of Education as 'Defendant' to release records relating to Defendant's recent pattern and practice of shutting down cooperation and information sharing with state law enforcement agencies in areas where federal and state regulators have historically worked hand-in-hand."

The information sharing is vital in protecting student borrowers from fraudulent and predatory practices by student loan servicers, for-profit schools, and other institutions, said the complaint.

The state claims the U.S. Department of Education "has persisted in its refusals to cooperate with state law enforcement agencies, without ever adequately explaining its resistance," and said it seeks relief from the court to compel the department to comply with its disclosure obligations under federal law.

"We've been left with little choice but to sue to put an end to the Department's stonewalling," Grewal said in the same release.

In the letter to DeVos, the attorneys general collectively claim the department's stated reasons for restricting law enforcement access to student data information were unfounded, and that two previous attempts in writing in the past year failed to get the department to change its ways. Now, they claim, recent policy changes will cause further deterioration of the working relationship between law enforcement and the department in fighting student loan fraud.

In recent weeks, the department published notices eliminating routine use of two records systems from disclosure for use by law enforcement agencies, the letter said. One of those records systems, the common origination and disbursement system, contains information about recipients of federal student financial aid, including demographic data of the borrowers, their loan balances, repayment plans, collections, deferment, and forbearances, the letter said. "Routine Use 3″ provided for disclosure of such data to any federal, state, local, or foreign agency or other public authority, the attorneys general said in the letter.

"We are concerned that the Department's elimination of this routine use may have much greater consequences for consumers than the Department's perfunctory rationalization suggests, the attorneys general wrote to DeVos. "We urge the Department to reverse course and return to its previous policy of sharing student loan information with State Attorneys General and other law enforcement agencies."