House Overturns DeVos Barrier to Student Loan Forgiveness in Bipartisan Vote

January 17, 2020 by Dan McCue
U.S. Secretary of Education Betsy Devos.

WASHINGTON – The House voted Thursday to overturn regulations introduced by Education Secretary Betsy Devos that critics contend made it more difficult for students to have their loans forgiven in the event a college made misleading or false claims.

The resolution to overturn DeVos’ rule change was introduced by freshman Rep. Susie Lee, D-Nev. It Passed by a vote of 231-180, with six Republicans supporting the effort.

The Obama-era rules, known as borrower defense to repayment, allow students to have their federal student loans forgiven if a school employed illegal or deceptive practices to encourage the students to incur debt to attend the school.

Without these rules, students are potentially on the hook to repay federal student loans even if they didn’t find gainful employment after graduation or finish their degree before the school closed.

DeVos struck down those rules last year.

In doing so, she argued the rules made it too easy to receive student loan forgiveness, and unfairly burdened taxpayers. She went on to assert that making students apply for loan forgiveness rather than having them receive it automatically would save taxpayers $11 billion.

After the vote to undo the DeVos rule change, Rep. Lee took to Twitter to thank both her Republican and Democratic colleagues for their support.

“We reminded every American today that education is a national priority,” she said.

She also specifically thanked Rep. Derek Kilmer, D-Wash., for standing with her to “demand justice for our students being scammed by predatory schools.”

In a Tweet of his own, Kilmer said, “Today, the House took bipartisan action to reverse a rule that denies relief to students who have been defrauded and misled by predatory, for-profit colleges. The federal government should be helping  these students move forward with their lives.”

Among those cheering the House vote Thursday, was Third Way, a public policy think tank.

“This isn’t about politics,” said Lanae Erickson, the organization’s senior vice president for Social Policy and Politics. “You don’t have to fully endorse previous iterations of the rule to acknowledge that Secretary DeVos’ rewrite is both extreme and extremely bad for students.

“The 2019 rule sets an unjustly short statute of limitations, requires claims to be discharged individually even in cases of well-documented and widespread abuse, and places a higher burden of proof on borrowers than any other consumer protection law,” she said.

Erickson also noted that according to the Department of Education’s own estimates, only 3% of federal student loans associated with illegal conduct by institutions would be forgiven under the new rule—and just 1% would be repaid by the predatory colleges themselves.

“It is clear [the DeVos] rewrite is inconsistent with the intention of the Higher Education Act and would do little to hold institutions financially accountable for unlawful activity or to protect the significant higher education investment of students and taxpayers,” Erickson said.

A spokeswoman for the Education Department defended DeVos’ rules, saying they hold nonprofit and private institutions alike accountable. She also said the secretary’s rule gave students a longer window to apply for forgiveness, although the department encourages schools to let students finish their programs.

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