You have /5 articles left.
Sign up for a free account or log in.

Illinois Democratic senator Dick Durbin urges passage of his resolution rejecting the borrower-defense rule at a press conference in February.

Office of Senator Dick Durbin

Congress is formally opposing U.S. Education Secretary Betsy DeVos’s controversial borrower-defense rule, assailed by critics as making it more difficult for borrowers to have their student loans forgiven if they’ve been defrauded by for-profit colleges and universities.

Ten Republican senators on Wednesday joined Democrats in approving a resolution expressing disapproval of the rule, joining the House, which passed a similar measure in January that would restore the rules that existed under the Obama administration.

However, the measure, which would undo DeVos's rule and bring back the Obama administration's policies, still needs President Trump's signature, a prospect Illinois Democratic senator Dick Durbin, who sponsored the resolution, called "unlikely" moments after the measure passed, 53 to 42. Durbin, at a news conference, was already preparing for a fight to overturn an expected veto by Trump.

Advocates opposing the controversial rule had become hopeful that Trump might sign the resolution after a Politico Pro report that Trump told Republican senators during a meeting Tuesday that he is “neutral” on the resolution. But Politico reported later that Trump was in favor of DeVos’s regulation after speaking with her on the phone. The White House on Wednesday also pointed to its statement in February that Trump's advisers would recommend vetoing the measure if it reaches the president’s desk.

Still, advocacy groups, including Third Way, the National Consumer Law Center, the American Federation of Teachers, the Institute for College Access & Success, and Young Invincibles, hailed the vote and said they were holding out hope Trump would cancel the rule.

The congressional votes are “an unequivocal, bipartisan message that military-connected students who have been defrauded out of their hard-earned GI Bill and burdened with unnecessary student loans should have a fair and equitable process for relief,” said Tanya Ang, vice president at Veterans Education Success. The group said veterans have been particularly targeted by for-profits because GI Bill benefits do not count toward a federal requirement that no more than 90 percent of the revenue of a for-profit institution come from federal funds.

DeVos angered the veterans' group and others last September when she issued the rule, replacing the policies the Obama administration created after the collapse of the Corinthian Colleges chain and subsequent flood of debt-relief claims.

Believing the Obama administration's policies were too permissive and essentially gave borrowers the chance at “free money,” DeVos added additional requirements for borrowers to get relief.

DeVos’s rule, for example, requires borrowers to demonstrate they suffered financial harm from their college’s misconduct and that the college made deceptive statements with “knowledge of its false, misleading, or deceptive nature.”

The new rules also added a three-year time limit for those borrowers to file claims, and each case will be considered individually, even if there is evidence of widespread misconduct at an institution.

Education Department spokeswoman Angela Morabito said in a statement after the vote, “It’s disappointing to see so many in Congress fooled by misinformation from the Left and the fake news narrative about our efforts to protect students from fraud. Students, including veterans, who are defrauded by their school and suffer financial harm as a result deserve relief, and our rule provides them relief.”

Pointing to the complaints by for-profit institutions they were singled out under the Obama administration rules, she said, “Instead of the Department picking winners and losers, and targeting its political enemies, our rule ensures equitable treatment of all institutions.”

Texas senator John Cornyn, the Senate’s second-highest-ranking Republican, also painted the Obama administration rules as too lax on Tuesday, equating the previous rules to presidential candidate (and fellow senator) Bernie Sanders’s proposal to eliminate all student debt.

Widespread loan forgiveness, he said, would be unfair to those who worked their way through school or decided to take the cheaper option of going to community college instead of a four-year institution. The cost to taxpayers, he said, is especially unfair to those who chose not to go to college.

Cornyn said Congress does need to act on the nation’s estimated $1.5 trillion of student debt. “We’re going to have to come up with some common-sense answers and not live in a fantasy land,” he said.

Proposing a more targeted approach, Cornyn said he will soon introduce a bill allowing veterans to use their GI Bill benefits to pay down student debt they incurred before joining the military.

However, Alaska senator Lisa Murkowski, one of the resolution’s 10 Republican supporters, said in a brief interview she worried the rule might have unintended consequences.

“I didn’t think that the new rule would give adequate notice to student borrowers that there had been deficiencies in their institutions,” she said.

Opponents of DeVos’s rule had been hopeful of getting four Republican votes to pass the resolution in the Senate after six Republicans voted for the House measure. They also believed it would be hard for Republican senators in difficult re-election races to vote against the resolution, as proponents painted the choice as supporting either defrauded students or “predatory” colleges.

Speaking on the Senate floor before the vote, for instance, Durbin called deceptive for-profit institutions “the coronavirus of higher education.”

And indeed, of the four Republican senators considered to be in the toughest races, three voted for the resolution: Maine’s Susan Collins, Colorado’s Cory Gardner and Arizona’s Martha McSally. Of the vulnerable candidates, only North Carolina’s Thom Tillis voted against the resolution.

And in a statement, North Carolina Democratic Party spokesman Robert Howard tried to capitalize on the vote. “Senator Tillis today stood with Betsy DeVos and predatory universities, voting down a measure that would help students defrauded by their college get back on their feet and get out from under their student loans,” he said.

Republican senators Shelley Moore Capito of West Virginia, Iowa’s Joni Ernst, Missouri’s Josh Hawley, Indiana’s Todd Young, Ohio’s Rob Portman and Alaska’s Dan Sullivan also voted for the resolution, in addition to a procedural motion Tuesday evening allowing the motion to be debated and voted on.

Next Story

Written By

More from Financial Health