News Release: AFR Welcomes passage of H.J. Res. 76 to roll back DeVos attack on scammed students


Jan 16, 2020

Alexis Goldstein,

Americans for Financial Reform welcomes the passage of H.J. Res. 76 to roll back Education Secretary Betsy DeVos’ devastating attempt to make debt cancellation for scammed students nearly impossible. The resolution passed 231 to 180 with bipartisan support; 6 Republicans and all Democrats voted yes, with 19 members not voting.

The DeVos update to the Borrower Defense to Repayment rule creates a standard that almost no  student will be able to meet. By the Department’s own estimates, with the DeVos rule in place, when a loan is incurred due to wrongdoing by a school, borrowers will still pay for 97% of the loan. The DeVos Administration estimates that the school, on the other hand, will only repay about 1% of loan amounts stemming from misconduct. This is in spite of the fact that the Department expects substantial illegal activity by schools. They estimated that in 2021 alone, nearly 200,000 borrowers will be subject to colleges’ illegal conduct.

DeVos also removed important protections, such as the prohibition on the use of forced arbitration and class action bans by schools. These “ripoff clauses” prevent students from going to court or joining together to sue schools that engage in repeated wrongdoing.

“The severe restrictions in the DeVos Borrower Defense rule are simply the latest in a long line of actions DeVos has taken favor abusive  for-profit schools at the expense of students,” said Alexis Goldstein, senior policy analyst at Americans for Financial Reform. “In addition to harming current borrowers, the DeVos changes to the Borrower Defense rule encourage these institutions to continue to rip people off to the detriment of students and the public purse.”

DeVos has been held in contempt for violating a court order barring collection on the debts of Corinthian students. When DeVos had to process the final debt cancellations approved by the Obama Administration,she wrote on the form that she signed it “with extreme regret.”

The House’s passage of H.J.Res. 76 is an important check on Secretary DeVos’ anti-student policies. We encourage the Senate to side with students over predatory schools, and quickly take up and pass S.J.Res. 56.