March 11, 2020

After Bipartisan Repudiation of DeVos Student Loan Rule, What Will Trump Do?

After Bipartisan Repudiation of DeVos Student Loan Rule, What Will Trump Do?

In a stunning bipartisan rebuke of Secretary of Education Betsy DeVos, the Senate today voted 53-42 to overturn a new Department of Education rule that would make it nearly impossible for students ripped off by their colleges to have their federal student loans cancelled.

Ten Republicans Senators — Shelley Moore Capito (WV), Joni Ernst (IA), Josh Hawley (MO), Cory Gardner (CO), Lisa Murkowski (AK), Dan Sullivan (AK), Susan Collins (ME), Todd Young (IN), Martha McSally (AZ), and Rob Portman (OH) — voted with all Senate Democrats present to reject the anti-student DeVos regulation.

The House passed the same measure in January, 231-to-180, with all Democrats and six Republicans voting yes. The resolution invokes the Congressional Review Act, which allows Congress to void a new agency rule via a resolution passed by a majority of both houses and signed by the president.

DeVos’s new rule is supposed to implement a 1995 federal law, referred to as borrower defense, that allows students deceived or abused by their colleges to petition the Department for loan relief. The theory behind the law was that by making a college eligible for federal student loans, the Department was essentially placing its Good Housekeeping seal on the school, and thus the Department should let the aggrieved students off the hook.

But the law lay dormant until the spectacular meltdowns of some large, bad-acting for-profit chains near the end of the Obama administration. The Department under Obama, after extensive deliberations with stakeholders, issued a borrower defense rule that gave students a fair chance for loan cancellation in the event of school misconduct. It also prohibited colleges getting student aid from denying students the right to sue for their injuries.

The Obama-era rule did not come close to making whole the injured students, who would not get back hundreds of hours devoted to their low-quality educations, or the money paid out of their own pockets or still owed for high-interest non-government loans. But the rule did something to help students — and to highlight the worst school offenders.

The for-profit college industry worked frantically to stop the Obama borrower defense rule, and harshly attacked it once it was issued.

After Donald Trump took office, his new education secretary, DeVos, hired former executives from for-profit colleges as her top aides. Then she completely gutted the borrower rule, amid other steps that aided for-profit schools and hurt students and taxpayers. Under DeVos’s version of the rule, each injured student might need their own team of lawyers and private investigators to meet the absurdly high standard of proof required for loan cancellation. And not only would students be unable to get loan relief from the government, they also could be prevented from suing their schools, because DeVos’s rule would again allow colleges to use “mandatory arbitration” clauses and other fine print to prevent lawsuits.

DeVos based her rule on the theory — backed up with zero evidence — that the real fraudsters were not the for-profit colleges but crooked students who would game the system for “free money.”

In addition to issuing her anti-student rule, DeVos has refused to act fairly, or act at all, on pending student requests for loan relief.

Leading veterans organizations strongly oppose the DeVos version of the borrower defense rule, which is scheduled to go into effect in July if the resolution does not become law. American Legion National Commander James W. “Bill” Oxford has written a letter saying the DeVos rule is “fundamentally rigged against defrauded borrowers of student loans.”

But congressional Republicans, with few dissenters, have firmly backed the for-profit college industry for more than a decade, despite its record of blatant waste, fraud, and abuse with taxpayer dollars, a record that has left hard-working Americans across the country buried in student debt, with no improvement in their career prospects. The GOP’s embrace of this awful industry has coincided with heavy expenditures by the for-profit schools on campaign contributions.

That record of GOP fealty to the for-profit college industry makes passage of the resolution today by the Republican-controlled Senate, over the opposition of Senate Majority Leader Mitch McConnell (KY) and Senate health, education and labor (HELP) committee chairman Lamar Alexander (TN), truly remarkable.

Along with McConnell and Alexander, GOP senators including Marco Rubio (FL), Mitt Romney, (UT), Mike Enzi (WY), Lindsay Graham (SC), Rick Scott (FL), Roy Blunt (MO), Thom Tillis (NC), and Pat Toomey (PA), stood with the predatory colleges and against students. But, for once in Congress, the bad-acting colleges lost, and students won.

The win is a tribute to the determination and leadership of Senator Dick Durbin (D-IL), a tireless advocate for students, freshman Rep. Susie Lee (D-NV), a new Hill champion, and other members.  Pro-student and veterans advocacy groups, and former students themselves, also fought hard for the measure, with strong outreach to GOP offices.

Durbin spoke on the Senate floor this morning, just before the vote. He described the false promises that predatory for-profit colleges have made to prospective students — promises about job prospects, starting salaries, and college costs. “These students were basically defrauded,” Durbin said. “These schools take the money and run, and the students end up holding the bag, with massive debts.”  He called on his Senate colleagues to give former students “a fighting chance to rebuild their lives.”

After Bipartisan Repudiation of DeVos Student Loan Rule, What Will Trump Do?

As the Durbin-Lee borrower defense resolution moved forward in Congress, and with for-profit college lobbyists continuing to freak out, the White House issued a formal Statement of Administration Policy declaring that if the bill passed the Congress, the president’s advisors would recommend that he veto it. The statement claimed that congressional overruling of the DeVos rule “would restore the partisan regulatory regime of the previous administration, which sacrificed the interests of taxpayers, students and schools in pursuit of narrow, ideological objectives.” The Administration also has claimed the rule would cost taxpayers too much money.

But there’s nothing narrow or ideological about writing wrongs for low-income students steered into high-priced, low-quality programs through deceptive ads and coercive recruiting tactics. And although the Obama version of the rule would cost money up front, in the long run it would save billions for taxpayers by compelling the Department of Education to push predatory schools out of the federal aid program. That’s exactly what the for-profit college industry has feared.

What remains of this struggle is a decision by President Trump. In the midst of a national crisis, could he perhaps be moved to overrule his advisers, do the right thing, and sign the resolution? Or will he instead veto it? He has ten days to decide.

In December, the Washington Post reported that Trump was demanding from his staff a plan to address student debt, because he saw his Democratic rivals gaining political ground on that issue. And Politico reported that when Senator Alexander told Trump in a meeting Tuesday that he would defend the administration by opposing the borrower defense resolution, Trump responded, “I have sort of a neutral position. I’m in between.”

Trump pledged during his 2016 campaign to help U.S. veterans, people in the “inner cities,” and “the forgotten men and women.” Those are many of the victimized students of predatory colleges.

But today Politico is reporting that Trump subsequently “indicated that he actually was in favor of DeVos’ regulation after speaking with her on the phone, according to a Senate GOP aide.”  And the White House Tuesday evening by tweet reaffirmed its formal opposition to the resolution.

Siding with predatory for-profit colleges and against students and veterans would be a disgraceful move. But it doesn’t seem likely now that the founder of fraudulent Trump University will override Betsy DeVos and sign the bill. I guess, as a certain stable genius often says, we’ll see what happens.

UPDATE 03-11-20 1:15 pm:

Angela Morabito, a Department of Education spokeswoman, provided a comment to media outlets on the Senate’s action, and, as Trump might say, she did an incredible job: “It’s disappointing to see so many in Congress fooled by misinformation from the left and the fake news narrative about our efforts to protect students from fraud. Students, including veterans, who are defrauded by their school and suffer financial harm as a result deserve relief, and our rule provides them relief.”

No it doesn’t.