Brown Takes to Senate Floor, Applauds Efforts to Undo Devos’s Harmful Rollback of Student Loan Protections

DeVos’s Borrower Defense Rule Guts Essential Protections for Student Borrowers and Taxpayers

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WASHINGTON, DC – Last night, U.S. Senator Sherrod Brown (D-OH) took to the Senate floor to shed light on U.S. Department of Education (ED) Secretary Betsy DeVos’s 2019 Borrower Defense rule, which has gutted essential protections for student borrowers and taxpayers. The Congressional Review Act (CRA) Resolution passed on the Senate Floor today with bipartisan support.

In February, Sen. Brown joined his colleagues, Senators Dick Durbin (D-IL) and Chuck Schumer (D-NY), in calling for support for the Congressional Review Act (CRA) Resolution, (S.J.Res. 56) that would block ED’s 2019 Borrower Defense rule, which rolls back protections for millions of Americans with student loans who were ripped off by shady for-profit colleges.

The DeVos borrower defense rule makes it almost impossible for borrowers who are defrauded by their school or harmed by their school’s closure to receive the relief for which they are entitled, and which Congress intended, under the Higher Education Act (HEA). According to an analysis by The Institute for College Access and Success, the DeVos borrower defense rule will cancel just three percent of all loans associated with misconduct.

In 2016, ITT Technical Institute collapsed after years of misconduct and misleading students, shuttering 130 campuses and declaring bankruptcy. Its failure affected nearly 45,000 students, including more than 6,000 veterans – saddling them with high levels of student debt and little hope for repaying it.  More than 3,000 Ohio students across nine campuses were impacted, included Akron, Columbus, Dayton, Hilliard, Maumee, Norwood, Strongsville, Warrensville Heights, and Youngstown.

Brown has been fighting to get students harmed by the ITT Tech closure the relief they deserve. After the closure was announced in 2016, Brown offered assistance to Ohio students who were harmed. In 2018, Brown demanded the Department of Education use all available means to help students affected by the closure and to end its attacks on rules put in place to protect student borrowers.

In October 2016, the Department of Education under President Obama issued a borrower defense rule that would provide $17 billion in student loan relief to students harmed by school misconduct and abrupt school closures. Upon taking office, the Trump administration and Secretary DeVos delayed implementation of the 2016 rule— a delay which was ultimately found by a federal judge to be illegal. This allowed the Obama administration rule to take effect. But the Trump administration then rewrote the rule to gut the student and taxpayer protections and protect predatory for-profits. In the meantime, Secretary DeVos has failed to process more than 220,000 borrower defense applications currently pending at the Department as of December 2019. Under this administration, ED has also created a flawed formula used to process currently pending borrower defense claims, making it nearly impossible for defrauded students to get a full loan discharge.

The Durbin-Schumer-Brown resolution would block DeVos’s efforts to shield predatory institutions like ITT Tech from being held to account. CRA resolutions of disapproval allow Congress to overturn regulatory actions of federal agencies with a simple majority vote in both chambers. A CRA resolution of disapproval must be passed by both the House and the Senate and signed by the President in order to overturn a rule. Last month, the House of Representatives voted on a bipartisan basis to pass its version of the measure, H.J.Res. 76 introduced by U.S. Representative Susie Lee (D-NV-03).

Brown’s remarks, as prepared for delivery can be found below:

I want to thank my colleague Senator Durbin for leading efforts this week to undo Betsy DeVos’s harmful rollback of protections for millions of Americans with student loans who were ripped off by shady for-profit colleges.

We’ve seen it in Ohio with schools like Corinthian and ITT – they make big promises with fake or deceptive job placement rates. They spend millions on misleading marketing, and trick students into taking out huge loans – only to close up shop and leave them with meaningless degrees or credits, and mountains of debt.

These are people trying to get an education to improve their job prospects and build a better life for themselves and their families. Too often, predatory schools target black and brown students, immigrants, low-income students, and first generation college students. 

Many of them are veterans, returning from serving our country and looking to start a new career.

And these for-profit schools take advantage of them to line the pockets of their CEOs.

We need to stand with defrauded student borrowers and hold these for-profit schools accountable – but of course we’ve learned not to hold our breaths when it comes to the Trump Administration holding anyone accountable.

Instead of figuring out how to provide relief for students, Betsy DeVos went to work figuring out how to let the schools that scammed them off the hook.

Almost 300,000 people have submitted borrower defense claims as of last December – and nearly 220,000 of those requests are still pending.

Right now, more than 7,700 Ohioans are waiting for relief.

In 2016, the Obama Administration announced a rule to help these students get their loans cancelled.

But the DeVos Department of Education has dragged its feet on processing borrower defense claims and rewrote the rule to make it nearly impossible for defrauded students to get the relief they were promised.

They are throwing up hurdle after hurdle – narrow time limits, making students gather all kinds of unnecessary paperwork, and banning students from appealing a decision.

DeVos’s rule also opens up the doors for schools to once again use  mandatory arbitration – legal fine print that for-profit schools sneak into their enrollment agreements that deny students their day in court.

I hear from Ohioans who have been scammed by these schools.

One Ohioan, Tasha Berkhalter, came to Washington last month to bring attention to this important issue.

She’s an Army veteran who served our country with honor and a mother of four. She returned home, and wanted to do forensics with the FBI, so she enrolled in ITT’s criminal justice program.

ITT told her that her GI benefits would cover the full tuition, and that they’d help her get a job after graduation.

But when she began to suspect the program wasn’t the high-quality education they claimed, and tried to transfer, she found out that other schools wouldn’t accept her ITT credits. The supposedly high-tech school was using outdated books.

Faced with the choice of continuing at ITT or starting completely over, Ms. Berkhalter finished her degree – and ended up $100,000 in debt, with a degree that employers didn’t take seriously.

Now she has lost her shot at using the GI benefits she earned serving our country, and is drowning in debt.

Ms. Berkhalter and other student veterans defrauded by shady schools deserve better than the treatment they’re getting under Betsy DeVos.

Not only is Betsy DeVos refusing to help, her new borrower defense rule will let other for-profit colleges continue to run the same scams on other students and student veterans.

The Consumer Financial Protection Bureau is also supposed to crack down on these schools and on loan servicing companies that handle people’s student loans – that’s why we created the CFPB, to look out for hardworking Americans like Ms. Berkhalter.

But under President Trump and Betsy DeVos, they’re refusing to let the CFPB look into loan servicers that are also scamming students.

And President Trump’s CFPB director is rolling over, refusing to do her job protecting the tens of millions of Americans with student loans.

It comes back to whose side you’re on.

Are you going to stand with student veterans, or for-profit CEOs?

Are you going to fight for defrauded Americans saddled with student loans, or the shady schools ripping them off?

It’s pretty clear who President Trump and Betsy DeVos are standing with. Over and over and over, President Trump and his administration betray the people he promised to fight for.

I hope my colleagues will join me in standing up and fighting for students by supporting this resolution and rejecting this unfair rule.

 

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