06.25.20

Committee Report Details Secretary DeVos’ Efforts to Delay and Deny Debt Relief for Defrauded Student Borrowers

On the eve of House vote to override President Trump’s veto and block DeVos’ new Borrower Defense rule, Committee releases report describing how the Education Department has abandoned hundreds of thousands of borrowers defrauded by predatory institutions

WASHINGTON – report released today by the Committee on Education and Labor details the Department of Education’s efforts to delay and deny debt relief for student borrowers who were defrauded by predatory institutions. The report captures nearly two years of congressional oversight and provides a comprehensive look into how Secretary Betsy DeVos prevented hundreds of thousands of defrauded borrowers from receiving the relief they deserved. 

The Committee released the report, entitled “Delayed and Denied: Borrower Defense Relief Under the Trump Administration,” on the eve of a House vote to override President Trump’s veto of a bipartisan Congressional Review Act resolution that would prevent Secretary DeVos’ new Borrower Defense rule from going into effect.  

“This report makes clear that the Trump Administration’s approach to Borrower Defense has always been to provide as little relief as possible to as few borrowers as possible,” said Chairman Robert C. “Bobby” Scott. “Borrowers Defense is a valuable tool to give victims of fraud a second chance at a quality education. Instead of using its authority to make defrauded borrowers whole, the Department delayed and denied relief for hundreds of thousands of people who are still in desperate need of help.”

Following the collapse of Corinthian Colleges, a large for-profit college chain, the Obama administration engaged in extensive investigations with state attorneys general and – after uncovering pervasive fraud – turned to the Borrower Defense provision to award relief quickly and fairly.  The Committee’s report offers a step-by-step review of how the Trump administration abruptly stopped processing claims from defrauded borrowers, refused to process a single claim for roughly 18 months, and then overhauled the Borrower Defense process to restrict relief for past and future borrowers

The report also describes how the Education Department illegally collected federal student loan payments from Borrower Defense applicants, garnished applicants’ wages and withheld their tax returns. Citing the Department’s blatant violation of a court order to cease collections for applicants, a judge held Secretary DeVos in contempt and fined the Department $100,000. 

To read the full report, please click here

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