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House Rebukes DeVos on Borrower Defense

January 17, 2020
 
 

The Democratic U.S. House of Representatives easily passed a resolution Thursday expressing disapproval of Education Secretary Betsy DeVos’s borrower-defense rule, which will make it significantly harder for student borrowers to receive debt forgiveness after being defrauded by colleges.

Six Republicans joined Democrats in passing the measure, 231 to 180, giving advocates some hope of getting it through the Republican Senate. However, the Office of Management and Budget said Monday it would advise vetoing the measure if it were to pass both chambers.

In the wake of a flood of loan-discharge applications after the collapse of the for-profit chain Corinthian Colleges in 2015, the Obama administration clarified the government’s discharge rules in 2016. However, some institutions worried the rule would put them on the hook for inadvertent marketing mistakes, as opposed to intentionally misrepresenting such things as the employability of graduates. Balking, as well, at Education Department estimates that the rule could cost $42 billion over the next decade, DeVos in August announced her own rule, which will replace the Obama administration’s rule for loans made on or after July 1.

“President Obama implemented a borrow-defense regulation that was irresponsible, drastically exceeded the scope of current practice and came with the shocking price tag of 42 billion dollars,” Representative Virginia Foxx, the North Carolina Republican and ranking member of the House education committee, said Wednesday on the House floor.

But consumer advocates said DeVos’s new rule would make it virtually impossible for students who were misled by predatory colleges to have their loans discharged. The rule “prioritizes the enriching of predatory schools over protecting defrauded students and American taxpayers,” the resolution's sponsor, Representative Susie Lee, a Nevada Democrat, said in her own floor speech.

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