Democrats vote to overturn Betsy DeVos rules on student debt
The House Labor and Education Committee voted on legislation Thursday that would overturn Education Secretary Betsy DeVos’ new policy on student debt discharge that goes into effect on July 1st, 2020.
Obama-era rules, which provided relief for students who were defrauded by for-profit colleges and ended up bearing student loans to that school. Since assuming her position, Secretary DeVos has “openly refused to implement the Borrower Defense rule, which has left hundreds of thousands of defrauded borrowers waiting for relief,” the Democrats stated." data-reactid="16">The Democrats’ legislation would reinstate Obama-era rules, which provided relief for students who were defrauded by for-profit colleges and ended up bearing student loans to that school. Since assuming her position, Secretary DeVos has “openly refused to implement the Borrower Defense rule, which has left hundreds of thousands of defrauded borrowers waiting for relief,” the Democrats stated.
dismissed by the White House — House Education and Labor Chairman Bobby Scott said it is ultimately a meaningful exercise: “It is a statement, and it gives opportunity to debate the regulation in a way that ... people don’t know about it.”" data-reactid="17">While it’s unlikely that Democrats’ legislation will become law — after it passes the House, it needs to pass the Senate and be signed into law by the President, which has already been dismissed by the White House — House Education and Labor Chairman Bobby Scott said it is ultimately a meaningful exercise: “It is a statement, and it gives opportunity to debate the regulation in a way that ... people don’t know about it.”
In an interview with Yahoo Finance, Scott added that “this new regulation on student loans … is so outrageous that I think it cannot go without comment,” and questioned ED’s unwillingness to act. “How long does it take to get this thing straight?” he asked. “We’ve applied as much pressure as we can — I mean, you’d think they’d function. … There’s no sense of urgency.”
‘Education is a national priority’
The Democrat-controlled committee has voted to reverse DeVos’ policy regarding the Obama-era Borrower Defense Rule, using the Congressional Review Act. Republicans, meanwhile, argued for the administration position.
“President Obama’s … flawed borrower defense regulations abandoned due process and limited student choice,” Rep. Virginia Foxx (R-NC) said on the House floor. “They want to actually harm the students they claim they want to help.”
held DeVos in contempt of court for violating an earlier order to stop collecting on loans from former students of a collapsed for-profit chain, Democrats stressed that DeVos “still refused to provide defrauded borrowers the relief they desperately need.”" data-reactid="42">Noting a major incident last year, when U.S. Magistrate Judge Sallie Kim in San Francisco held DeVos in contempt of court for violating an earlier order to stop collecting on loans from former students of a collapsed for-profit chain, Democrats stressed that DeVos “still refused to provide defrauded borrowers the relief they desperately need.”
Democrats added that instead, the department had come up with a new rule in August last year that was way more complicated and much more restrictive.
report by the nonprofit Institute for College Access & Success, 53% of defrauded students’ debt was forgiven under Obama-era rules. That number fell to just 3% in DeVos’ term." data-reactid="44">According to a report by the nonprofit Institute for College Access & Success, 53% of defrauded students’ debt was forgiven under Obama-era rules. That number fell to just 3% in DeVos’ term.
Congressional Review Act
Congressional Review Act (CRA), which stems from a 1996 law that grants Congress extensive power to invalidate rules that federal agencies establish. If the effort is ultimately successful, it will also make it more difficult for future administrations to try the same policies again." data-reactid="48">Democrats are operating under the Congressional Review Act (CRA), which stems from a 1996 law that grants Congress extensive power to invalidate rules that federal agencies establish. If the effort is ultimately successful, it will also make it more difficult for future administrations to try the same policies again.
prevent the implementation of the Obama-era Teacher Prep regulation.” " data-reactid="49">“The CRA is a rarely-used vehicle with its own set of rules,” Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators (NASFAA), told Yahoo Finance. Coval added that the last time it was used was in 2017 “to prevent the implementation of the Obama-era Teacher Prep regulation.”
Getting Borrower Defense to the finish line during the middle of Trump’s term was going to be a little more challenging, Coval noted.
“Upon expected passage in the House, the resolution will head to the Senate, where it will only require a simple majority to pass,” Coval explained. “The chances of passage are less clear in the Senate, but President Trump has already indicated he would veto the resolution if it made it to his desk.”