King’s sponsors try to overturn DeVos rule denying student loan cancellation

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A long-standing feud between U.S. Education Secretary Betsy DeVos and Congressional Democrats over student loan cancellation intensifies as hundreds of thousands of borrowers continue to wait for help with loans they claim to be fraudulent.

DeVos narrowly avoided a subpoena to Congress earlier this month after a long fight against the US House Committee on Education and Labor. His critics in Congress say they still intend to question him about the Trump administration’s controversial loan cancellation rule, and some lawmakers are working to shake his policy completely.

House and Senate Democrats presented a resolution to overturn DeVos’ rule. Senator Angus King is the only member of the federal delegation from Maine to have signed the law as a sponsor.

However, the Democratic effort to overturn the rule is unlikely to be passed by the GOP-led US Senate, and even if it did, it would almost certainly face a veto from President Donald Trump.

Congress says DeVos is filibustering

A stalemate in Congress with DeVos on the issue came to a head in mid-November, when U.S. House Education and Labor Committee Chairman Robert Scott (D-Va.) Testified and get more information. On the eve of this summons, the Ministry of Education agreed to hand over the ministry’s files on the matter.

US Secretary of Education Betsy DeVos testifies before Senate subcommittee in March 2018 | Zach Gibson, Getty

The committee then canceled a November 19 hearing it had scheduled on student loans, so staff could review the new information. Democrats are still planning to bring DeVos in to testify before Committee of the Whole, potentially on December 12, according to the committee.

“Over the past year, we have asked the ministry to explain why it is refusing to provide debt relief to over 210,000 defrauded borrowers,” Scott said in a statement. Scott said he and his staff would “carefully review” the new Education Department documents and discuss them with DeVos.

The federal student loan controversy revolves around borrowers who say they have been cheated or misled by their colleges and universities. As of June 2019, more than 210,000 borrowers were waiting for the government to process their applications, according to federal data.

“It’s kind of an ongoing saga, and it’s important because there are tens of thousands of students whose lives, financial lives and so on, are at stake here,” said Antoinette Flores, who followed the issue as Associate Director for Post-Secondary Education at the Center for American Progress. “They are simply neglected because of political struggle and political failures.”

Scott recently published a six-page memo detailing 80 different attempts to correspond with the ministry on the borrower’s defense rule, dating back to October 2018.

For its part, the Ministry of Education says it has responded to the committee’s requests.

Last week, they sent Mark Brown, the retired U.S. Air Force major general appointed to head the student loans office, to brief committee staff. The ministry provided documents to the committee the day before the summons.

But even those documents are insufficient to answer questions from Congress, according to a Democratic aide on the committee. They are working to get more information from the education department.

Students victimized by for-profit colleges

The “borrower defense” rule dates back to 1995, when it was first listed as consumer protection. But it was rarely used until complaints began to pile up from students who had been enrolled in for-profit colleges who had passed away. Three major for-profit universities recently closed their doors: DeVry, ITT Tech and Corinthian.

Almost all of the petitions come from students enrolled in for-profit colleges, according to an analysis by the Century Foundation, a progressive think tank. The number of complaints has increased as some for-profit colleges have closed or been the subject of police investigations.

“This problem has gone on for a long time without any resolution, and the number of complaints continues to grow,” said Flores of the Center for American Progress.

The first big spike in claims came after the Corinthian colleges closed, which the Consumer Financial Protection Bureau and several state attorneys general had investigated.

A federal court ruled in 2015, Corinthian engaged in deceptive lending practices, advertising false job prospects and the school’s career services. The company filed for bankruptcy. Thousands of students have called on the federal government to cancel their loans, claiming they were based on false promises.

In response, the Obama administration rewrote the borrower defense rules to put in place a system of loan cancellation in the event of institutional misconduct. The education department finalized this rule in October 2016, just months before Trump took office.

“With extreme discontent”

When DeVos took over as head of the agency, she said she wanted to rewrite the Obama-era rule, which she felt was too lenient.

DeVos had to sign around 16,000 Corinthian student complaints that the Obama administration approved but not finalized before the inauguration. She wrote three words in the comments: “with extreme displeasure”.

DeVos said students need to be protected from predatory practices, but schools and taxpayers shouldn’t necessarily be held accountable for all of this.

The Trump administration has stopped processing new and pending requests and has started working on new regulations. Meanwhile, student advocacy groups sued the agency for inaction. But as the battle winds its way through the courts, the pending claims are still awaiting a response and it is unclear when or how the department will deal with them.

The Department of Education finalized its new regulations last August to oversee the process for future claims. Under the revised rule, students can still request a repayment whether or not their loan is in default, but this adds some repayment requirements for future claims. DeVos said he would correct Obama-era regulations “through common sense and carefully crafted reforms that hold colleges and universities accountable and treat students and taxpayers fairly.”

Above: Senator King speaking at a committee hearing | official photo

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