Thousands of students who were enrolled at a for-profit college in the months leading up to its collapse would have never spent their time and money there if not for an illegal decision by Secretary of Education Betsy DeVos, a new lawsuit claims.

The case, which is seeking class-action status, was filed by two of these students Monday in U.S. District Court for Washington, D.C. The plaintiffs are seeking to have their federal student loans from that period wiped away.

They claim that DeVos’s decision to allow the Accrediting Council for Independent Colleges and Schools — which oversees for-profit colleges — to continue to operate amid allegations the organization wasn’t an effective monitor and put them in harm’s way. ACICS provided accreditation, which is necessary for a college to operate, for the students’ school, Virginia College, despite questions about whether it was effectively serving students.

In December, Education Corporation of America, Virginia College’s parent company, collapsed following months of financial turmoil.

“The secretary’s priority was on propping up these institutions and not worrying about these students and why there are standards to protect them,” said Eric Rothschild, senior counsel at the National Student Legal Defense Network, an organization founded by Obama-era Department of Education officials, which advocates for students through litigation. NSLDN, along with Democracy Forward, a litigation organization aimed at exposing government corruption, is representing the students.

The Department of Education and ACICS didn’t immediately respond to a request for comment on the case.

Students say decision cost them time and money

Both of the students, Mark Passut and Mark Kaiser, were studying at Virginia College to become occupational therapy assistants in fall 2018, a period when DeVos has provided ACICS with temporary recognition, allowing schools under its purview, like Virginia College to continue to operate, the suit claims.

Passut took on $4,324 in federal student loans to attend the school that semester and Kaiser took on $3,558, according to court documents. Both owe nearly $25,000 in federal for their education at Virginia College, which collapsed in December. Despite the time and money spent at the school, neither received credit when they transferred to Eastern Virginia Career College to finish up their degrees.

Passut, who saved for three years to attend Virginia College, according to court documents, will have to spend an extra four months getting his degree — time when he won’t be earning income. He has two children.

Kaiser expects his re-entry into the workforce to be delayed by at least a year while he finishes up his studies and he anticipates spending another $8,000 on tuition.

If ACICS hadn’t received provisional approval from the Department, the students “would have done then what they have now done, which is, find another school, used their loan money there and may be quite likely already be out in the job market,” Rothschild said. “Instead that’s being delayed many months.”

Battle over ACICS dates back to the Obama administration

The suit is the latest development in a battle over ACICS that date backs to the Obama administration. Accreditors like ACICS, which provide a stamp of approval that’s necessary for colleges to receive federal financial aid funds, need to be recognized by the Department of Education in order to operate.

In 2016, the Obama administration withdrew its recognition from ACICS amid allegations the organization was allowing tax dollars to flow to troubled for-profit colleges, including Corinthian Colleges and others that later collapsed. In the three years leading up to 2016, 17 colleges facing investigations and overseen by ACICS took in $5.7 billion in federal financial aid, according to an analysis from the Center for American Progress, a left-leaning think tank.

ACICS filed a lawsuit challenging the Obama administration’s decision. As part of that lawsuit, the court remanded the decision over ACICS’s future back to the Department. Following that decision, DeVos temporarily reinstated ACICS in April 2018. The suit filed Monday claims DeVos’s decision to temporarily recognize ACICS was illegal and allowed troubled colleges to continue to operate putting students, like the plaintiffs, at risk.

In between the time when ACICS lost its recognition and it was temporarily reinstated, Virginia College looked for accreditation elsewhere, but was unable to find another organization to certify the school, the suit notes.

That raises questions both about the quality of the school and of ACICS, Rothschild said. “There shouldn’t just be one accreditor who is the default for everyone who can’t otherwise pass muster,” he said.

Ultimately, DeVos reinstated ACICS permanently in November. The suit doesn’t challenge that decision directly, Rothschild said, but by shining a light on what he describes as DeVos’s rushed decision to reinstate ACICS temporarily, the suit may provide insight into the Department’s approach to the final decision, he said.

ACICS did eventually pull its accreditation from Virginia College in December after months of concern about whether it was effectively serving students.