Senate Votes to Block Trump Administration Borrower Defense Rule

By Allie Bidwell Arcese, NASFAA Managing Editor

In a rare showing of bipartisan cooperation, 10 Republican senators joined Democrats on Wednesday in voting for a measure to overturn the Trump administration’s borrower defense regulations, which have come under scrutiny from lawmakers and consumer advocates alike since being published in September. The rules are set to take effect July 1, 2020. 

The Senate voted 53-42 to block implementation of the rule, under the Congressional Review Act (CRA), which allows Congress to pass such resolutions to prevent a federal agency from implementing a rule, with the full force of the law. The agency also cannot issue a similar rule without authorization from Congress. The CRA is unique in that it only requires a simple majority to pass. 

The House passed a CRA resolution to overturn the DeVos borrower defense rule in January. If the resolution took effect, it would restore the 2016 borrower defense regulations put in place under the Obama administration. 

On Tuesday night, 10 Republicans — Sens. Shelley Moore Capito of West Virginia, Susan Collins of Maine, Joni Ernst of Iowa, Cory Gardner of Colorado, Joshua Hawley of Missouri, Martha McSally of Arizona, Lisa Murkowski of Alaska, Rob Portman of Ohio, Dan Sullivan of Alaska, and Todd Young of Indiana  — joined their Democratic colleagues in voting to move forward with debate on the issue. Those same Republican senators voted in favor of the resolution on Wednesday.

Despite the support from across the aisle, it's unlikely the resolution will take effect. The White House in January released a statement saying that if the resolution passed, advisors would recommend that President Donald Trump veto it. However, POLITICO reported Wednesday that during a closed-door meeting with Republicans on Tuesday, Trump said he had "sort of a neutral position."

Education Secretary Betsy DeVos, however, quoted a tweet from Sen. Dick Durbin (D-Ill.), who led the effort in the Senate to overturn the rule, that said senators would have to choose between siding with students, or "with Betsy DeVos and #4profit colleges." DeVos said that was "not the choice at all."

"The choice is between standing w/ students and taxpayers, or returning to a flawed, much-criticized Obama rule that puts community colleges & HBCUs at risk," she said in the tweet. "Our rule is simple: if you were defrauded & harmed, you get relief."

Ever since DeVos in 2017 announced plans to halt the implementation of the Obama-era regulations and rewrite them — a move that was met with legal challenges — the process has been fraught with issues. Amid the Trump administration’s rewrite of the rules, the Obama-era regulations went into effect after a court declared invalid two delays issued by the Department of Education (ED) prior to the rule’s original effective date of July 1, 2017.

After months of discussion, the negotiated rulemaking committee convened to rewrite the regulations ended in non-consensus. ED’s proposed rules were immediately met with concern from members of the higher education community — including NASFAA — and have since faced a number of lawsuits and congressional inquiries.

Just this week, Rep. Bobby Scott (D-Va.), chairman of the House Committee on Education and Labor, wrote a letter along with other committee Democrats urging ED’s Office of Inspector General to provide more reasoning behind DeVos’s methodology to award partial relief to some borrowers, which was quickly criticized in December for using what appeared to be faulty math.

Take a listen to a special episode of NASFAA's "Off The Cuff" podcast, as Justin Draeger interviews Ben Miller of the Center for American Progress about the partial relief methodology.

Meanwhile, DeVos and others from her agency have been repeatedly brought before congressional committees — and at other times threatened with a subpoena to appear before them — to address ED’s handling of borrower defense claims. The backlog of pending claims currently stands at roughly 217,000, according to data from ED's Office of Federal Student Aid (FSA).

In December the House education committee spent nearly four hours grilling DeVos on the backlog, with Scott saying that while ED "has been searching for a legal method to shortchange these defaulted borrowers, those defaulted borrowers have been left with mountains of debt, worthless degrees, and none of the job opportunities they were promised."

Durbin said in a press briefing following the vote that "what was at stake here were the lives of hundreds of thousands of student borrowers who made a mistake by listening to schools that misled them, misrepresented, and defrauded them."

"They ended up deep in debt, with nothing to show for it," he continued.

He went on to say that when borrower defense was first created — in the 1990s — "we didn't think many people would ever use it, that there'd ever be a situation where students were defrauded into taking out student loans."

Durbin had also said that veterans had been particularly affected by predatory tactics.

Tanya Ang, vice president of Veterans Education Success, said in a statement that the Senate's vote sent "an unequivocal, bipartisan message" that veterans and servicemembers "who have been defrauded out of their hard-earned GI Bill and burdened with unnecessary student loans should have a fair and equitable process for relief."

"We urge President Trump to stand with veterans and direct the Department of Education to adopt new rules that are fair, transparent, and recognize the important contributions of veterans and military-connected students in higher education," she continued.

 

Publication Date: 3/12/2020


David S | 3/12/2020 9:57:55 AM

Characterizing DTR regulations as "a flawed, much-criticized Obama rule that puts community colleges & HBCUs at risk" is playing fast and loose with the truth even by this administration's standards (and remember, this administration is led by the founder of Trump University). The only schools that are at risk are those who deceive and defraud students. If the Secretary is claiming that community colleges and HBCU's deceive and defraud students, I would ask her to provide evidence. Her actions throughout her tenure as Secretary make it pretty clear that she sides with those who commit fraud and is more interested in protecting them than protecting students.

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