Project Praises Senator Durbin’s Proposal to Overturn Secretary DeVos’ Borrower Defense Rule| Press Release

November 20, 2019

BOSTON – Today, Senator Dick Durbin criticized Department of Education Secretary Betsy DeVos’ rewritten borrower defense rule. The new rule guts essential protections for student borrowers and taxpayers. Durbin urged his Senate colleagues to support his Congressional Review Act (CRA) resolution of disapproval when it comes to the Senate floor for a vote.

The following is a statement from Toby Merrill, director of the Project on Predatory Student Lending at the Legal Services of Harvard Law School, on the Congressional Review Act and borrower defense.

 

“Secretary DeVos relentlessly attacks student borrowers’ rights. She has refused to follow the existing law and cancel the loans of for-profit college students who were defrauded by their school. Secretary DeVos has put forth a devastating new rule that eliminates important borrower protections and will harm generations of future students. It must be stopped. We thank Senator Durbin for continuing to stand up for students and for introducing a resolution to reject this policy.”

 

Secretary DeVos’ new borrower defense rule reverses basic borrower protections included in the 2016 borrower defense rule, such as denying federal student aid funds to schools that enforce forced arbitration clauses in student contracts, providing for a group borrower defense process, and ensuring automatic loan discharges for students at schools that closed abruptly. The new rule imposes impossible burdens on defrauded borrowers, including a three-year statute of limitations, and requiring a litany of evidence, including proof of financial harm beyond that of the federal loan itself.

Background:

The Project on Predatory Student Lending, representing students who have been cheated by predatory for-profit colleges, has led the way to force the Department to implement the 2016 Borrower Defense regulations. In Bauer v. DeVos, a federal judge ruled that the Department’s attempt to delay the rule was illegal, forcing the Department to implement the regulations in October 2018. This case directly resulted in the Department of Education’s cancellation of $150 million in debt for 15,000 students whose for-profit schools had closed while they attended. In September, the Department eliminated nearly a hundred million dollars of debt for ITT students upon the 3 year anniversary of ITT’s closing.

In June, the Project on Predatory Student Lending filed a lawsuitSweet v. DeVos, against the U.S. Department of Education and Secretary DeVos seeking to force the agency to follow existing law and adjudicate the more than 200,000 pending borrower defense applications. In less than a month after the lawsuit was filed, hundreds of students submitted their testimony to have their voices heard.  Click here for data about the students’ who submitted testimony. Click here to view testimonial excerpts and videos from students across the country who were defrauded by for-profit colleges.

 

About the Project on Predatory Student Lending

Established in 2012, the Project on Predatory Student Lending represents former students of predatory for-profit colleges. Its mission is to litigate to make it legally and financially impossible for federally-funded predatory schools to cheat students.

The Project has brought a wide variety of cases on behalf of former students of for-profit colleges. It has sued the federal Department of Education for its failures to meet its legal obligation to police this industry and stop the perpetration and collection of fraudulent student loan debt.