Update | Comments on Borrower Defense Call Out Betsy DeVos’ Lies

August 31, 2018

Public comments from leaders across the country cite the Project’s revelation that the proposed borrower defense rule is based on fundamental lies

 

The public comment period for the Department of Education’s proposed new Borrower Defense rule came to a close this week, ending the thirty-day window in which the public had the opportunity to weigh in on the new proposed rules.

But what happens when the government proposes a rule that is based on fundamental lies and misleads the public? The comment period becomes meaningless. That is exactly what has happened this month with the Department of Education’s proposed changes to the Borrower Defense rule, and it is why dozens of elected leaders have called for it to be withdrawn, citing the Project on Predatory Student Lending’s initial comment.

As soon as the comment period opened, the Project submitted an initial comment showing that the Department was lying about how it has historically interpreted the Borrower Defense rule, and that this lie infects the Department’s estimates of how much the rule will cost. We attached the Department’s own documents proving our point. Following this revelation, others began speaking out and citing these inaccuracies as a reason that this disaster of a proposal should be rescinded immediately.

 

California Attorney General Xavier Becerra was one of the first to speak out. In his letter to the Department of Education, he cited the Project’s comment and said:

 “Secretary Betsy DeVos has proven yet again that she’s out of touch with the long-standing practice of allowing borrowers to submit claims when they suspect fraud. I urge the Department of Education to withdraw its proposed rule immediately. If the Department proceeds with this flawed, harmful and erroneously justified regulation, it should extend the comment period to a minimum of 60 days to allow for the submission of detailed comments from the public.”

 

Massachusetts Representative Joseph Kennedy III called on the Department to withdraw the rule, citing in his letter its egregious harm to students and the misinformation revealed by the Project.

“The proposed rule contains significant misrepresentations and incorporates those misrepresentations into its calculation of the cost of the rule, preventing the public from understanding and commenting on an accurate explanation. The Department erroneously asserts that it will return to the Department’s original practice of only accepting claims from borrowers facing coercive collection practices that it says “persisted for 20 years.” This is entirely inaccurate. Borrowers have been able to present claims outside of collections for the entire tenure of the rule proceeding prior to 2015. Stating that the Department only processed defensive claims prior to 2015 is not only false, it is misleading to the public. The Department’s own documents, as submitted by the Project on Predatory Student Lending, reflect the historical practice of the Department accepting claims outside of coercive collection proceedings. Because of these flaws, the proposed rule should be withdrawn and corrected immediately.”

 

Massachusetts Senator Elizabeth Warren called the proposed rule a “gross betrayal of the Department’s mission to serve students” in her letter to Betsy DeVos, which also cited the Project’s comment findings that the rule is based on fundamental lies.

“The Department’s willingness to mislead the public in this NPRM is appalling. And, the Department’s reliance on inaccurate information in order to restrict and virtually eliminate debt relief for defrauded borrowers is a gross betrayal of the Department’s mission to serve students.”

 

45 Senate Democrats, including Senator Warren, also submitted a letter highlighting these falsehoods, and the multitude of other reasons why this rule harms students and helps predatory for-profit schools.

“Not only is this proposal poor public policy, but it also breaks from previous practices adopted by both Democratic and Republican administrations. The Department has inaccurately asserted that “affirmative” claims were not permitted until the Obama Administration reinterpreted the 1995 borrower defense regulations. Yet, as the Legal Services Center of Harvard Law School makes clear, the Department accepted “affirmative” borrower defense claims well before 2015, including numerous cases between 1998 and 2003. The Department’s reliance on inaccurate information makes clear its motives are political, rather than the best interests of students.”

 

Massachusetts Attorney General Maura Healey joined AG Becerra and 18 other Attorneys General in submitting a comment, calling the rule “a license to cheat students and taxpayers.”

“The proposed regulations accordingly would be disastrous for students and taxpayers, and a windfall for the exclusive benefit of law-breaking schools. We urge the Department to rescind this misguided proposed rulemaking.”

 

House Committee on Education and Workforce Democrats submitted their own joint letter, expressing their strong opposition to the Department’s proposed rule.

“Throughout the NPRM, the Department wrongly declares that prior to the 2016 final borrower defense rule, the agency only accepted claims from borrowers who were in post-default collection proceedings (i.e., defensive claims). As seen in the evidence submitted by the Legal Services Center of Harvard Law School on August 2, 2018, the Department has been accepting claims from borrowers who were in good standing on their loans dating back to 1998. 2 This mischaracterization of history should be enough to consider withdrawing this proposed rule.”

 

Click here to learn more about the proposed Borrower Defense rule.