Washington D.C. – Today the US Senate voted to disapprove of Education Secretary Betsy DeVos’ new “Borrower Defense” rule that would have left defrauded student borrowers struggling to pay illegitimate debts. On a vote of 53-42, Senate Joint Resolution 56 – and the fate of tens of thousands of defrauded borrowers – now moves to President Trump’s desk.
The President’s advisors have indicated they will urge him to veto the bill, but consumer watchdog group Allied Progress called on President Trump to listen instead to the American Legion and the ten Republican Senators and six GOP Members of Congress who agree the DeVos rule only makes a bad situation worse for harmed students.
“The President obviously loves to win. Here’s his chance to join a bipartisan coalition and leading veterans’ groups to deliver a win for taxpayers and ripped off student borrowers alike,” said Derek Martin, director of Allied Progress. “Or he can choose instead to bail out one of the least popular members of his cabinet.”
Added Martin: “Secretary DeVos’ rule makes life even more difficult for victims of predatory for-profit colleges throughout the country, which can wind up shifting costs to taxpayers. You know DeVos is offering a bad deal when even the McConnell Senate rejects it. The President can insist on a better deal by simply signing this bill.”
At issue is the costly and corrupt rule Secretary DeVos advanced in August 2019 that made it next to impossible – apparently by design – for student borrowers who were scammed by shady colleges to cancel their loans and receive full restitution (also known as a Borrower Defense Claim). There are now over 217,000 backlogged Borrower Defense claims. Under powers outlined in the Congressional Review Act, the resolution before the President would restore the 2016 “Borrower Defense to Repayment” rule, a protection that provides a path to debt forgiveness for students ripped off by predatory higher-ed institutions, oftentimes for-profit colleges.
DeVos’ fatally-flawed borrower defense rule was the natural result of the Secretary surrounding herself at the top with former lobbyists and executives from the for-profit college industry. By the Education Department’s own estimates, the DeVos rule shortchanges fraud victims by over $500 million a year compared to the current protections — a boon to the for-profit college industry that has given over $8 million to Republican campaigns. The original Borrower Defense Rule was projected to recoup over $17 billion in losses for harmed students by 2020, and was designed to protect taxpayers.
In February, Allied Progress released results of a national poll that found Secretary DeVos’ approval rating has plummeted to 28 percent, and that there is strong support across the political spectrum for Congress to investigate her recent misconduct.