Lawmakers Again Call on ED to Reinstate Tool Meant to Assist Defrauded Borrowers

By Hugh T. Ferguson, NASFAA Staff Reporter 

House Democrats are again demanding that the Department of Education (ED) immediately make available a previously utilized online tool meant to assist defrauded student loan borrowers apply for loan forgiveness.

Following their original letter from October — which included a number of documents alleging that ED intentionally derailed the tool — Reps. Bobby Scott (D-Va.) and Carolyn Maloney (D-N.Y.), chairman and chairwoman of the House education and oversight committees, are now concerned that the White House is interfering in the process of reinstating the tool meant to ease the application process for borrowers who were in many instances defrauded by for-profit institutions.

“Last month, we released evidence that Department officials froze this same web tool despite their vehement and public denials to the contrary,” the committee leaders wrote. “Once again, the Department’s public explanations do not hold water, and it now appears that the White House may be interfering in this process.”

At the time lawmakers expressed concern in October, Angela Morabito, a spokeswoman for the department, said the allegations were entirely false.

"Why would Department leaders interfere with the creation of a tool that implements the BD regulations promulgated in 2019 under Secretary DeVos’s leadership?” Morabito said.

ED has said the web tool was suspended over an Office of Management and Budget (OMB) request for “technical edits to the form,” which Scott and Maloney dispute. The lawmakers said press reports indicate ED never obtained OMB approval to remove the site, as required by the Paperwork Reduction Act, raising concerns over the approval process.

However, since ED submitted its OMB request on Aug. 28, 2020 and suspended the online tool more than 75 days later, on Nov. 18, 2020, without an OMB response the agency’s approval may be inferred under the Paperwork Reduction Act, which requires a 60-day response, the lawmakers said in their letter.

It is unclear whether the tool will be reinstated before President-elect Joe Biden takes office in January, but the issue of borrower defense could see additional developments in the coming months due to a recent ruling from a federal judge that scuttled a borrower defense settlement over ED’s blanket denials of student loan relief claims.


Publication Date: 11/24/2020

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