Chairman Scott Asks Education Department Watchdog to Investigate DeVos’ Plan to Deny Full Debt Relief for Defrauded Borrowers

WASHINGTON – Today, Committee on Education and Labor Chairman Robert C. “Bobby” Scott (VA-03) sent a letter to the Education Department’s Office of Inspector General (OIG) requesting an investigation into the Department’s plan to deny full debt relief for borrowers defrauded by for-profit colleges. The request comes after multiple independent analyses found that the Department’s new plan to provide only partial relief to defrauded borrowers was “nonsensical and harmful to students.” 

On December 10, the Department unveiled a new methodology for calculating relief for defrauded borrowers, like those who attended Corinthian Colleges and ITT Technical Institute. At a hearing with Secretary DeVos on December 12, Rep. Lori Trahan (MA-03) pointed out that in some cases borrowers would only be eligible for full debt relief if they could document “negative earnings,” which is impossible. 

The following day, the Department altered information on its website regarding the formula – without notifying the public – to conceal the negative earnings issue.

In his letter, Chairman Scott asked the OIG to examine whether the Department incorporated feedback from experts during the creation of the formula, and to what extent the Department considered the formula’s significant impact on defrauded borrowers. Chairman Scott also asked the OIG to examine the specific changes made to these public-facing documents, and what process the Department followed when making these changes.

“As part of this review, the Committee is requesting OIG review changes made to specific public-facing documents between December 10 and December 13,” Chairman Scott wrote. “...We have concerns that the Department did not consult internal or external statistical experts, did not have the methodology approved through proper channels, and did not sufficiently analyze the costs and benefits associated with its methodology.”

To read the letter to the Education Department’s Office of Inspector General, click here.


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