Politico reports:

JUDGE DEALS SETBACK TO DEVOS’ HANDLING OF STUDENT FRAUD CLAIMS: The Trump administration’s sweeping efforts to overhaul Obama-era higher education policies drew their first judicial rebuke on Friday evening when a federal judge in California temporarily blocked Education Secretary Betsy DeVos’ new approach to processing student loan fraud claims.

— A federal judge in San Francisco blocked DeVos from carrying out her policy of granting only partial loan forgiveness to some defrauded for-profit college students. U.S. Magistrate Judge Sallie Kim ruled that the Trump administration’s new “tiered relief” process for those student fraud claims violates a federal privacy law meant to protect how government agencies collect and use individuals’ personal information. Read the full story here.

— The court ruled that the Education Department violated the Privacy Act by improperly using borrowers’ federal earnings data from the Social Security Administration to calculate the amount of loan forgiveness for each student. That policy, unveiled by DeVos in December, was aimed at providing defrauded borrowers with debt relief that’s commensurate with how much they suffered. The Trump administration said it was a fairer approach that would protect taxpayers against “runaway costs” of forgiving large amounts of federal student loans.

— “This is an important ruling for former Corinthian Colleges students,” said Toby Merrill, the director of Harvard Law School’s Project on Predatory Student Lending, which brought the lawsuit along with Housing and Economic Rights Advocates, a nonprofit legal advocacy group. “It clearly states that the Department of Education must immediately stop using its lawless partial denial rule.”

— The preliminary injunction issued Friday blocks DeVos from carrying out the partial loan forgiveness policy “as it currently exists.” But the 38-page ruling makes clear that the Trump administration could come up with a different process that provides partial loan forgiveness for defrauded students. Judge Kim wrote that “there is no question that the [Education] Secretary has the power to determine the amount of relief a borrower can obtain” so long as that process for doing so is lawful. She also rejected the former students’ claims that DeVos’ partial loan forgiveness policy was “arbitrary and capricious” or that it violated their due process rights.

— What’s next: The judge ruled that the Education Department’s violation of the Privacy Act warranted an immediate order blocking the policy. But she said she didn’t have enough information to decide whether to go a step further and order the department to provide full loan forgiveness to the former Corinthian students. She set a hearing on that issue for June 4.