[WASHINGTON, DC] – U.S. Senators Chris Murphy (D-Conn.) and Richard Blumenthal (D-Conn.) and several of their Senate Democratic Colleagues, led by U.S. Senate Democratic Whip Dick Durbin (D-IL), today introduced a pair of amendments to the Labor, Health and Human Services appropriations bill – part of the “minibus” appropriations package being considered this week by the Senate – to protect relief for student loan borrowers who have been defrauded by for-profit colleges and universities and hold institutions accountable. The amendments would prohibit Secretary of Education Betsy DeVos from issuing final regulations to repeal, rewrite, or amend the protections contained in the Obama Administration’s Borrower Defense and Gainful Employment rules. 

“These amendments will stop Secretary DeVos from scrapping necessary protections set by the Obama administration that prevent students from being defrauded by for-profit schools,” said Blumenthal and Murphy. “These predatory for-profit institutions have a solid track record of leaving students in the lurch with a worthless degree and a mountain of debt. It’s time the Trump administration holds these schools accountable.”

 

Borrower Defense Amendment

Through the Higher Education Act, Congress created a mechanism called Borrower Defense (BD) for students defrauded by institutions of higher education to receive federal student debt relief.  The collapses of Corinthian and ITT Tech after years of widespread fraud and abuse led to tens of thousands of students from those and other predatory for-profit colleges to file BD claims with the Department of Education.  The explosion in claims resulted in the Obama Department of Education issuing new regulations in November 2016 to create a more fair and efficient process for considering BD claims and new safeguards to protect students and taxpayers from future abuse. 

Last month, Secretary DeVos issued a draft rule that would replace the Obama Borrower Defense rule and effectively prevent defrauded borrowers from being able to receive debt relief under Borrower Defense. It cuts $13 billion in expected relief from defrauded borrowers, requires borrowers to default before they can receive relief, places heavy burdens on borrowers to prove their claims, including providing that their school intended the harm, eliminates group relief, and allows institutions to force students to give up their rights to sue the school in a court of law.

Joining Blumenthal, Murphy, and Durbin are Sherrod Brown (D-OH), Tom Carper (D-DE), Chris Coons (D-DE), Kirsten Gillibrand (D-NY), Maggie Hassan (D-NH), Martin Heinrich (D-NM), Jeff Merkley (D-OR), Bill Nelson (D-FL), Jack Reed (D-RI), Tina Smith (D-MN), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Tammy Baldwin (D-WI), Catherine Cortez Masto (D-NV), Kamala Harris (D-CA), Mazie Hirono (D-HI), Ed Markey (D-MA), Bernie Sanders (I-VT), Brian Schatz (D-HI), Debbie Stabenow (D-MI), Ron Wyden (D-OR), Tammy Duckworth (D-IL), Dianne Feinstein (D-CA), and Jeanne Shaheen (D-NH).

 

Gainful Employment Amendment

Under the Higher Education Act, career education programs are required to “prepare students for gainful employment in a recognized occupation.”  The Gainful Employment Rule, which took effect July 1, 2015, uses debt-to-earnings rates to determine which career education programs are meeting that requirement.  Programs that consistently saddle students with too much debt compared to the earnings they can expect after completing the program lose eligibility to receive Title IV federal financial aid.  The rule also requires institutions to provide disclosures to students on average program earnings and debt.  Of the more than 800 programs that failed the GE criteria in 2016, 98 percent were for-profit colleges. 

Earlier this month, the Trump-DeVos Department of Education issued a draft rule to rescind the Gainful Employment regulations.  Without the accountability provided by GE, poor-performing programs will continue to take in millions in federal taxpayer-funded student aid while students are left with huge amounts of debt and an education that doesn’t lead to a decent job.  Eliminating GE is expected to cost taxpayers $5.3 billion over ten years.

Joining Blumenthal, Murphy, and Durbin are Sherrod Brown (D-OH), Tom Carper (D-DE), Chris Coons (D-DE), Kirsten Gillibrand (D-NY), Maggie Hassan (D-NH), Jeff Merkley (D-OR), Jack Reed (D-RI), Tina Smith (D-MN), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Tammy Baldwin (D-WI), Catherine Cortez Masto (D-NV), Kamala Harris (D-CA), Mazie Hirono (D-HI), Ed Markey (D-MA), Bernie Sanders (I-VT), Brian Schatz (D-HI), Ron Wyden (D-OR), Tammy Duckworth (D-IL), Dianne Feinstein (D-CA), and Jeanne Shaheen (D-NH).

Both amendments are supported by The Institute for College Access and Success, National Association of College Admissions Counseling, American Federation of Teachers, Vietnam Veterans of America, Veterans Education Success, Americans for Financial Reform, The Education Trust, Center for Responsible Lending, and Young Invincibles.

 

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