Today, the Senate voted to overturn a new rule from Education Secretary Betsy DeVos and the Trump … [+]
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Today the Senate rebuked Education Secretary Betsy DeVos and the Trump Administration on a bipartisan basis. Secretary DeVos recently rewrote the “borrower defense to repayment” rule, a regulation that provides debt relief to students who were defrauded by their colleges. Using the Congressional Review Act, the Senate has joined the House of Representatives to stop Secretary DeVos from implementing a new rule she has put into place. Joining the Democrats, 10 Republican Senators voted to overturn the rule.
Under the Higher Education Act, the Secretary of Education has the authority to discharge debt from schools that defrauded students. In 2016, the Obama Administration issued a new regulation under the borrower defense to repayment rule—known as borrower defense—after the floodgates opened with fraud claims from students who indebted to for-profit schools like Corinthian College. The new rule was aimed at creating a better standard and process for students to receive relief.
That rule was set to go into effect in July 2017, but Secretary DeVos delayed it and then rewrote the regulation. Meanwhile, thousands of student borrowers who were defrauded by schools like Corinthian and ITT Technical Institute have waited for years for the Trump Administration to discharge this debt.
DeVos’s new rule created a nearly impossible burden of proof for student borrowers. Previously, a student could show a substantial misrepresentation by the school to receive relief. Under DeVos’s rule, students would have to also show that the school did so knowing that it was false or the school acted with reckless disregard with accurate information. But worse, they also had to show they were financially harmed. This set up an unreasonable standard that would be incredibly difficult to prove.
Additionally, Secretary DeVos created a formula for the existing rule that would determine the relief students would receive based on predicted earnings. Secretary DeVos defended the formula as “scientifically robust” to a House committee. But many disagreed.
Among many other complaints, advocates and experts showed how flawed this formula was and how it would harm students. Ben Miller of the Center for American Progress said the data used was not representative, as it only looked at the earnings of graduates, even though these schools had increasingly high dropout rates.
Economist Doug Webber described how flawed the proposal was and wrote “the methodology proposed by (the Department of Education) is wholly inappropriate and confuses many statistical concepts that aren’t meant to be used together.” The formula would provide partial relief to defrauded borrowers based on the harm they felt. So a borrower who was employed but had less than stellar earnings might only receive partial relief if their earnings exceeded the threshold set in the formula.
According to Miller, “the formula makes it mathematically impossible for borrowers from one third of programs to have any shot at full forgiveness.” That’s because the formula used flawed statistics that would require borrowers to have negative earnings to receive full relief. Based on Webber’s analysis of the Department’s data, a dental assistant would have to have attended a program where the median graduate earned less that $5,468.27 to have all of their loans discharged. And that’s just the beginning. This likely built on the opposition to DeVos’s proposed rule.
Opponents of the rule spoke up and Congress took the rare move to use the Congressional Review Act to overturn the rule. Championed by Rep. Susie Lee (D-NV), the House passed a resolution to overturn the rule in January and sent the resolution to the Senate. Senator Dick Durbin (D-IL) has long led the fight against for-profit colleges that defrauded students and sponsored the resolution in the Senate.
While both are Democrats, the Senate proved today that protecting defrauded students is a bipartisan issue with many Republican Senators joining to overturn the rule. More than 85 groups—including nine veterans’ groups like the American Legion—opposed this rule. President Trump has previously said he would veto the resolution, but that was before Republicans voted for it. Last night, his Office of Management and Budget released a statement that his advisors would recommend vetoing the resolution.