PRESS RELEASE
Fighting to protect students defrauded by predatory, for-profit colleges, Congressman Brian Higgins (NY-26) voted to override President Trump’s veto of a Resolution rejecting the new Department of Education “Borrower Defense Rule.” A bipartisan majority of members in the House of Representatives voted in favor (238-173) but the measure did not receive the two-thirds vote needed for a veto override.
The Joint Resolution (H.J.Res. 76), which earned bipartisan approval in the House of Representatives in January and in the Senate in March, reversed a rule put forth by Education Secretary Betsy Devos that would deny debt relief to students who became financial victims of their college, university, or other institution of higher education. President Trump vetoed the Resolution on May 29, 2020.
“Students simply looking to further their education were scammed by some for-profit colleges, swindled out of money and left without a degree. Instead of standing with the students who deserve the money stolen from them, this Administration is standing with predatory colleges,” Higgins said.
Affected borrowers include students at ITT Technical Institute, which had a location in Western New York from 1996 until 2016 when it abruptly closed.
Originally, under the Higher Education Act borrower defense repayment rule created by Congress in 1992, student borrowers who were defrauded by their school were entitled to relief up to six years from when they responsibly could have discovered the misrepresentation. Under Secretary Devos, the Department of Education finalized changes to the rule in 2019, diminishing the timeline to three years with claims outside the three-year window being rarely allowed even when the school’s misconduct was discovered through a government investigation. Under the new rule a borrower would need to prove that not only did the school make a substantial misrepresentation on which the borrower relied when deciding to take out loans, but also that the school made the misrepresentation with the knowledge that it was false, that the school acted with reckless disregard, and that the borrower suffered a specific type of financial harm from this misrepresentation.
An analysis of the new DeVos Rule estimates, if implemented, the share of eligible loan debt forgiven under the Borrower Defense Rule would drop from 53 percent using the Obama-era standard to just under 3 percent under the new DeVos rule.
The resolution is supported by Student Veterans of America, the National Education Association, American Legion, NAACP, the National Consumer Law Center, AFL-CIO the Center for Responsible Lending, the American Federation of Teachers and dozens of other organizations.
