Wexton Votes to Overturn DeVos Rule that Denies Debt Relief to Defrauded Students
Washington, January 16, 2020
Washington, DC -- Today, Congresswoman Jennifer Wexton (D-VA) voted to pass H.J.Res. 76, which would block a new Department of Education rule implemented by Secretary of Education Betsy DeVos intended to deny debt relief to students who have been defrauded by predatory, for-profit colleges. Wexton is a co-sponsor of the resolution, which passed the House of Representatives with bipartisan support.
“The DeVos rule makes it practically impossible for student borrowers who have been defrauded by predatory, for-profit colleges to receive the debt relief they’re entitled to under the law,” said Congresswoman Jennifer Wexton. “Betsy DeVos is giving predatory colleges the green light to defraud students. If students from my district are cheated by their colleges, I want to make sure they can -- at the very least -- have those loans forgiven. I’ll keep fighting to make college more affordable and accessible for all students.”
Under the Higher Education Act, student borrowers who have been defrauded by predatory, for-profit colleges are entitled to relief from their loans. Following the collapse of two such institutions in 2016, Corinthian Colleges and ITT Technical Institute, President Barack Obama issued the Borrower Defense Rule to streamline the debt relief process for defrauded students. Borrower defense allows students whose schools misled them or violated the law to pursue federal loan repayment forgiveness, even if the school did not close.
Secretary of Education Betsy DeVos refused to implement the Borrower Defense Rule and instead has made it more difficult for hundreds of thousands of defrauded students to get the relief they deserve.
DeVos’ new rule, issued in August of 2019, makes it so that students can still be denied relief if they cannot prove the school intentionally defrauded them, cannot file their claim in the restricted timeline, or cannot document precisely how much financial harm they suffered due to the fraud -- even if the school is found to be violating the law.
The DeVos rule eliminates automatic relief to students whose schools closed before they finished their programs and allows predatory schools to use mandatory arbitration agreements against students seeking relief. The rule also weakens requirements for predatory schools who were facing widespread allegations of fraud to set aside money to cover potential debt relief; DeVos’ rule would result in predatory schools repaying only about 1 percent of debt relief to defrauded students, leaving the other 99 percent to fall on defrauded students and American taxpayers.
The resolution passed by the House today fully blocks the DeVos rule and would help defrauded students across Virginia be made whole, including constituents of Virginia’s 10th Congressional District who have contacted the Congresswoman about being defrauded by the now-closed Argosy University in Arlington.
20 Attorneys General, including Virginia Attorney General Mark Herring, have signed on to a letter supporting H.J.Res. 76.
The full text of the resolution can be found here.