House approves Lee resolution to torpedo DeVos student loan rule

By: - January 16, 2020 11:06 am
susie vs betsy

Nevada Democratic Rep. Susie Lee after the House approved her student loan rule. Sen. Dick Durbin (D-IL), right, has introduced companion legislation in the Senate. (Photo: Rep. Susie Lee Twitter).

WASHINGTON — The U.S. House passed a resolution Thursday that would overturn a Trump administration rule that critics say guts protections for defrauded student loan borrowers.

The resolution expresses congressional disapproval of the so-called borrower defense rule, which was revised by Education Secretary Betsy DeVos. 

Led by Nevada Democratic Rep. Susie Lee, the resolution was approved with support from 225 Democrats and six Republicans. Opposing it were 179 Republicans and one independent. 

Nevada’s delegation split along party lines on the effort, with Democratic Reps. Dina Titus and Steven Horsford joining Lee to vote in favor of the resolution. Republican Rep. Mark Amodei voted against the resolution. 

“By passing this resolution, the House made it clear that we care more about defending defrauded students than enriching predatory schools,” Lee said in a press conference after the vote. “We told Betsy DeVos that we’re not going to sit on the sidelines while these institutions scam our families, our friends, our neighbors and our veterans.”

DeVos’ revisions to the Obama-era program make the process for applying for and granting loan forgiveness unnecessarily difficult and burdensome, the resolution’s supporters said. That has left defrauded students — many of whom are low-income, of color or have served in the military — with useless degrees, crushing debt and little recourse for relief. 

“These are Americans we should be standing up for, not taking advantage of,” said Lee, who has worked at nonprofit organizations in the education sector.

Horsford said in a statement that the resolution would protect students “who have been lied to and preyed upon by for-profit colleges who are left with crushing debt, useless degrees and no job opportunities that they were initially promised.” 

Amodei meanwhile, sided with the administration.

“If the federal government wants to completely forgive student loans, they should not use fraud accusations against institutions to do so on a wholesale basis,” he said in a statement after Thursday’s vote. 

“The Obama regulations failed to distinguish between fraud and inadvertent mistakes made by schools, a critical mistake considering the Department of Education can inflict significant financial penalties on institutions suspected of engaging in fraud, ultimately causing the institution to close despite no intentional offense,” Amodei added. 

Sen. Dick Durbin (D-Ill.) has introduced a similar resolution in the Senate and said Thursday he is reaching out to GOP colleagues to garner their support. 

Nevada Sens. Catherine Cortez Masto and Jacky Rosen are both co-sponsors of that effort. 

Trump veto threat

Lee’s resolution faces an uphill battle in the GOP-controlled Senate and Trump has threatened to veto the measure. 

But Lee told the Current in an interview earlier this week that the resolution nonetheless serves as a valuable “check” on the administration’s student loan policies. 

“Every state in this country has thousands of students that have been defrauded by these predatory schools,” she said. Opponents of the resolution are “going to have to go back to their constituents and explain their vote on this.”

Originally conceived as a form of consumer protection, the borrower defense rule was rarely used until claims began to pile up from students who had been enrolled in for-profit colleges. A big spike in claims came after the closure of Corinthian Colleges, which left hundreds of thousands of students in debt and with an education of little value.

In response, the Obama administration rewrote the rule to set up a system of loan forgiveness in cases of institutional misconduct. The rule took effect in October 2016, months before Trump took office. 

When DeVos took the helm of the Education Department, she said she wanted to rewrite the Obama-era rule, which she thought was too lenient. 

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

Last year, the Education Department finalized its new regulations to oversee the process for future claims. Under the revised rule, students can still seek repayment regardless of whether their loan is in default, but it adds some requirements for repayment for future claims. 

DeVos testified on behalf of the change before the House Education and Labor Committee last month. “Any form of blanket approval for forgiveness is not fair to the taxpayers nor does it represent the spirit and intent of any of the borrower defense to repayment rules,” she said at the time.

Bobby Scott, chair of the House Education and Labor Committee, disagreed Thursday, saying in a statement that the Obama-era rule “provides a fair and streamlined process to provide debt relief to defrauded students.”

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Allison Stevens
Allison Stevens

Allison Stevens is a Washington D.C. reporter for States Newsroom, a network of state-based nonprofit news outlets that includes Nevada Current.