June 15, 2024

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Senate passes rebuke of DeVos over student loan forgiveness

The Senate on Wednesday gave final congressional approval to a measure that would overturn rules issued by Education Secretary Betsy DeVos in 2019 that made it harder for students to get loans erased after being misled by for-profit colleges.

The measure, which passed with a 53-42 vote, stands as a rare rebuke of DeVos by the Republican-led Senate. The House approved the measure in January, and it now goes to President Donald Trump. The White House has threatened a presidential veto but it remains to be seen whether Trump will overturn a resolution that drew support from 10 Republican senators.

The Education Department quickly condemned the move and defended her policy.

“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,” Education Department spokeswoman Angela Morabito said in a statement. “Our rule is consistent with Congress’s intent, it protects students and it treats taxpayers fairly.”

Lawmakers moved to reverse DeVos’ policy through the Congressional Review Act, which allows Congress to overturn federal rules with a simple majority of both chambers and approval of the president. The Senate measure was led by Sen. Dick Durbin, D-Ill., who told lawmakers that DeVos has made it nearly impossible for students to get their loans canceled after attending fraudulent for-profit colleges.

“She made it extremely difficult for these students to get any relief,” Durbin said before the vote. “These schools take the money and run, and the students end up holding the bag with massive debts.”

The measure aims to strike down DeVos’ changes to a policy known as borrower defense to repayment, which promises to cancel federal student loans for borrowers whose colleges commit fraud. It dates to the 1990s but was expanded under the Obama administration to forgive loans for students whose colleges used false claims to get them to enroll.

The Obama-era update was directed at thousands of students who attended Corinthian Colleges, ITT Technical Institute and other for-profit college chains that shut down after authorities found that they made exaggerated claims about the success of their graduates.

But when DeVos took office, she suspended the rules before they took effect and began writing new ones even as thousands of applications awaited review. Her 2019 update made it harder for students to get their loans canceled by requiring them to prove that their colleges knowingly misled them and also caused personal financial harm.

DeVos’ rules required students to apply for relief within three years of leaving the school, and they ended a policy allowing the Education Department to cancel loans for large groups of students that attended schools known to have committed fraud.

The measure would undo DeVos’ changes and restore the rules created under President Barack Obama. The move drew quick praise from borrower advocates and consumer protection groups, along with Democrats and some Republicans.

“We applaud the Senate for its bipartisan vote to overturn the borrower defense rule that attacks the rights of borrowers,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard University. “We call on the president to put the voices of students above the interests of for-profit colleges by signing this bipartisan legislation.”

Among the Republicans who backed the measure was Sen. Cory Gardner of Colorado who said he was “proud to stand with students who were defrauded by educational institutions.”

“I voted in favor of the Congressional Review Act and against the 2019 rule due to concerns that the new procedures would make it too difficult for defrauded students to receive the relief they are due,” Gardner said in a statement.

DeVos previously said the 2016 rules were too generous and allowed too many students to get their loans erased at the expense of taxpayers. Her rules were estimated to save nearly $13 billion over a decade, primarily by reducing the amount of loan relief awarded to students.

Her changes were opposed by borrower advocates but embraced by for-profit colleges, who said their industry had unfairly been targeted by the Obama administration.

The policy has been a frequent source of tension between DeVos and Democrats, who say the Trump administration stopped processing claims while DeVos changed the rules. As of January, the Education Department said it had nearly 170,000 pending applications.

In total, about 52,000 have been approved, the agency said, while 28,000 have been rejected.

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