Senate Democrats Pressure DeVos on Closed School Discharges

By Allie Bidwell, NASFAA Managing Editor

A group of more than 30 Senate Democrats on Tuesday wrote to Education Secretary Betsy DeVos, urging her to take action to expedite assistance for more than 32,000 students affected by recent and sudden school closures. 

The senators—led by Sen. Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Sen. Dick Durbin (D-IL)—said in the letter that they are “extremely concerned” with how the Department of Education (ED) has responded to the abrupt closures of three major for-profit chains: Education Corporation of America (ECA), Vatterott Educational Centers, Inc., and Dream Center Education Holdings (DCEH). 

Recent data from ED, they wrote, shows that just 11% of borrowers eligible for a closed school loan discharge have received relief, and 4% of the students enrolled in these institutions at the time of closure have been able to transfer to another institution to continue their studies. 

“[ED] has a duty to help students impacted by school closures,” the senators wrote. “Providing such students with prompt information about loan discharge and transfer options is critical to allowing them to recover.” 

ED spokesperson Liz Hill told POLITICO that ED worked “tirelessly” with accreditors and institutions “to help students land on their feet and find a place to complete their education” through a teach-out agreement. 

She added that ED helped some students, such as over 1,000 clinical psychology students from Argosy University, transfer to complete their degrees. That effort was not captured in the data provided to lawmakers in April, she told POLITICO.

Still, the senators took issue with the process for closed school loan discharges and urged ED to examine the process more broadly, noting the “high rates of denial” among borrowers who have submitted applications. About 60% of borrowers who submitted such a discharge application—more than 35,000 borrowers—on or after Jan. 20, 2017 have been denied, the senators wrote. Meanwhile, fewer than half (44%) of the borrowers from the institutions in question—ECA, Vatterott, and DCEH—who submitted applications have been approved.

“When so many borrowers that submit a closed school discharge application are being rejected, [ED] must reevaluate its processes to ensure that borrowers receive the support and assistance they need, deserve, and that Congress intended,” they wrote. “The anemic rates of approval for closed school discharge or transfer for these students threatens to erode their confidence in our system of higher education and in federal financial aid.”

 

Publication Date: 8/8/2019


Aesha E | 8/9/2019 11:41:20 AM

I agree with you, Michael. The department should reach out to these students, not the other way around.

G. Michael J | 8/8/2019 12:0:05 PM

My comment will demonstrate some ignorance, but - with the information available about a school's closure and its students' indebtedness, why are students required to apply for such relief?

Brenda T | 8/8/2019 11:17:48 AM

funny, as they are the ones that set the rules on how these things can be handled

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