By:  Andrew Kreighbaum
Source: Bloomberg Government

DeVos Refuses Democrats’ Call to Testify on Student Loan Relief

Education Secretary Betsy DeVos on Thursday declined a demand from House Democrats to testify on student loan forgiveness, a move likely setting up a congressional subpoena to compel her to appear.

Bobby Scott (D-Va.), the chairman of the House Education and Labor Committee, has made repeated requests for DeVos to testify about the Education Department’s inaction on debt relief applications—known as borrower defense claims—filed by former students of the shuttered for-profit Corinthian Colleges chain.

According to a Education and Labor aide, Scott is considering his options, including issuing a subpoena.

After Scott last week threatened a subpoena if DeVos didn’t agree to appear, the Education Department instead offered to make Mark Brown, the chief operating officer of Federal Student Aid, available to testify. Scott rejected that offer and set a Thursday evening deadline for DeVos to agree to appear.

“In short, General Brown is not an appropriate witness as he was not privy to the conversations laying the foundation of the Department’s posture regarding Borrower Defense,” Scott wrote in a letter to DeVos Wednesday.

“Further, you appear to be the Department official who makes the decisions about whether to discharge loans. The COO, while charged with FSA’s implementation of your policy, does not authorize relief for defrauded borrowers.”

In the Department’s response Thursday, principal Deputy General Counsel Reed Rubinstein told Scott the administration considered Brown the best official with knowledge relevant to oversight issues. And he said testimony from DeVos would only be warranted after hearing from the FSA chief and a legal fight over a 2017 loan relief formula is resolved.

“To be clear, the Department is not necessarily averse to the Secretary appearing before the Committee at some point in the relatively near future to testify regarding Borrower Defense,” Rubinstein wrote. “But on the facts and law of this case, the Department believes testimony by the Secretary may be appropriate only after the Committee hears from General Brown and the Ninth Circuit renders a final decision on the merits in the pending appeal.”

Appeal of Contempt Ruling

Scott has sought answers from the department since last year on its inaction on student debt relief claims. He’s putting new pressure on DeVos to testify after a federal judge in California held her in contempt of court last month over improper collection of loan payments from former Corinthian borrowers. The Education Department plans to appeal that contempt order.

DeVos Fined $100,000 for Failure to Forgive Student Debt

DeVos and other department officials have told lawmakers in the past that they can’t offer a timeline for review of borrower defense claims while the department appeals a court ruling on a partial debt relief standard unveiled in 2017. In a May House hearing, a Trump administration official said the department can’t determine the amount of harm each borrower has suffered – or the amount of loan relief they should receive – because their partial relief formula was blocked.

The Education Department has essentially stopped providing loan forgiveness for borrower defense claims during the appeals process. The total number of outstanding borrower defense claims now exceeds 210,000, including roughly 60,000 from former Corinthian students.