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VIRGINIA MERCURY: U.S. House to vote on upending DeVos student loan forgiveness policy

By Allison Stevens

The U.S. House is expected to vote next week on a resolution that would overturn a federal rule that critics say guts protections for defrauded student loan borrowers.

The resolution — led by Nevada Democratic Rep. Susie Lee — expresses congressional disapproval of the so-called borrower defense rule, which was revised by President Donald Trump’s education secretary, Betsy DeVos. Three Virginia Democratic representatives — Jennifer Wexton, Bobby Scott and Gerald Connolly — are co-sponsors.

The revision makes the process for applying for and granting forgiveness “unnecessarily difficult and burdensome for the students who we are supposed to be protecting,” Lee said in a statement last fall when she introduced the bill.

The House Rules Committee is scheduled to consider the resolution on Monday ahead of an expected vote in the full House chamber later in the week. 

House Majority Leader Steny Hoyer (D-Md.) said the resolution would “ensure those due relief can get it.” 

The resolution is expected to clear the Democratic-led House, but passage is unlikely in the GOP-controlled Senate. Even if it does clear the upper chamber, it would almost certainly face a veto from Trump.

Sen. Dick Durbin (D-Ill.) has introduced a similar resolution in the Senate. It has the backing of 42 Democratic and two independent co-sponsors, including Virginia Democrat Tim Kaine.  

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.

The Education Department finalized its new regulations last August 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.