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Borrower-Defense Rule Saved by Trump Veto but Still Faces Fight in Court

June 1, 2020
 
 

U.S. Education Secretary Betsy DeVos’s controversial borrower-defense rule cleared one hurdle with President Trump’s veto Friday evening of a congressional resolution that would have undone it. But the rule, which would make it harder for borrowers to have their student debt forgiven if they were defrauded by their colleges, still faces a legal challenge before it is due to go into effect July 1.

Still ongoing is a suit challenging the law in the U.S. District Court for the Southern District of New York, brought in February by the Project on Predatory Student Lending and Public Citizen Litigation Group on behalf of the New York Legal Assistance Group. "The rule is terrible. It is bad policy and it is legally indefensible, and students are going to defeat it in court," Eileen Connor, the Project on Predatory Lending's legal director, said in a statement Sunday.

As for the political obstacle, advocates acknowledged an override is not expected, even though 10 Republican senators and six members of the House joined Democrats in passing the resolution opposing the rule.

The veto had been expected. In February the White House issued a statement opposing the resolution and saying that, if passed, Trump’s advisers would recommend a veto of the rule, which, beginning July 1, creates a higher bar for having loans forgiven than regulations created under the Obama administration.

But in recent days, the hopes of the rule’s critics had increased that Trump might let the resolution go into effect by taking no action before a deadline Saturday.

“Whereas the last administration promoted a regulatory environment that produced precipitous school closures and stranded students, this new rule puts the needs of students first, extends the window during which they can qualify for loan discharge, and encourages schools to provide students with opportunities to complete their educations and continue their pursuit of economic success,” the Trump administration said in its veto message.

The Education Department also praised the veto. “This administration is committed to protecting all student from fraud and holding all schools accountable when they fail their students. This administration’s rule does just that, despite false claims from many corners. The Secretary is thankful to the president for his leadership on this issue,” the department said in a statement.

However, the veto drew wide criticism, including from the American Council on Education, Democrats and veterans' groups, who have been pushing for the rule’s repeal because many of those targeted by for-profit colleges are veterans.

“President Trump’s veto of my bipartisan bill to help our veterans was a victory for Education Secretary DeVos and the fraud merchants at the for-profit colleges,” Senate Democratic Whip Dick Durbin said in a statement. “My question to the President: in four days did you forget those flag waving Memorial Day speeches as you vetoed a bill the veterans were begging for?” said Durbin, who sponsored the resolution in the Senate.

ACE said on Twitter Saturday, “We are deeply disappointed by this veto. This important and needed measure would have offered protections from shady schools and unscrupulous operators that all students deserve.”

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