WASHINGTON, D.C. – The U.S. House of Representatives passed, H.J.Res. 76, a resolution disapproving the Department of Education’s current Borrower Defense to Repayment rule under the Congressional Review Act. Once in effect, the 2019 regulation will severely weaken accountability for predatory for-profit colleges, prevent defrauded students from accessing relief, and fuel the growing $1.5 trillion student debt crisis that disproportionately affects students of color.
The resolution, introduced in November by U.S. Representative Susie Lee (D-Nev.), seeks to protect students and taxpayers from predatory for-profit institutions that engage in deceptive acts and misrepresentations and saddle students with high debt loads and worthless degrees.
Rep. Lee and U.S. Senator Dick Durbin, who sponsored the companion bill in the Senate, held a press conference at the Capitol following the House vote. They were joined by congressional colleagues, education advocacy groups, and students affected by Secretary of Education Betsy DeVos’ Borrower Defense Rule.
Ashley Harrington, a senior policy counsel at the Center for Responsible Lending (CRL), released the following statement:
We commend the Members who have supported this bill and strongly urge the Senate to vote and pass this resolution. Restoring the 2016 Borrower Defense rule will give thousands of students a viable pathway to obtain relief and hold predatory institutions accountable for their abusive practices.
Far from what we have today, the Borrower Defense rule was originally intended to protect borrowers and taxpayers from deceptive practices like the widespread abuses of ITT Tech and Corinthian Colleges that left thousands of students wondering how to recover the time and money they invested in institutions that abruptly collapsed— To date, many of these students continue to wait for debt relief.
Instead of preventing predatory institutions from wasting taxpayer dollars, Secretary DeVos is undermining the federal investment in higher education by shielding the interests of for-profit institutions and private corporations that prey on students of color, low-income borrowers, veterans, women, and older Americans. We urge Congress and the current Administration to stop protecting these predatory institutions at the expense of already vulnerable and marginalized groups.
Additional Background:
- If passed by the Senate and signed by the president, H.J.Res. 76 would overturn the 2019 regulation. Under that scenario, the current Borrower Defense rule, established in 2016 during the Obama Administration, would remain in effect.
- Predatory for-profit schools worsen the student debt crisis and drive up student loan default rates, accounting for more than 1/3 of defaults while serving only 5 percent of students.
- Devos’ Borrower Defense rule requires borrowers to provide lengthy and extensive documentation of “harm” before a claim can be reviewed. The Department itself estimates that only 3 percent of the loans that result from school misconduct would be cancelled under their rule. Schools would be held accountable for reimbursing borrowers for just 1 percent of these loans.
- The new regulations also set aside important provisions that provide for group claim relief, automatic discharge after a school closes, and prevent schools from limiting student rights through mandatory forced arbitration clauses.
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Press Contact: vincenza.previte@responsiblelending.org