Washington, D.C. - Today, Rep. Lucy McBath introduced H.R. 3662, the Relief for Defrauded Students Act of 2019, legislation that would make the borrower defense rule permanent and allow for student loan relief in cases of misconduct by institutions. Representatives Abby Finkenauer (IA-01), Katie Porter (CA-45), Mary Gay Scanlon (PA-05), Cindy Axne (IA-03), and Sharice Davids (KS-03) joined McBath in introducing this bill. The National Education Association (NEA), American Veterans (AMVETS), and Veterans Education Success have all endorsed this legislation.
“It is our duty as legislators to protect the success of our students as they pursue higher education,” McBath said. “I have heard from too many young people in my district who were defrauded by schools like Argosy University. Our kids should be leaving school ready for success, not paying for the misconduct of predatory institutions. It is past time we held the Department of Education accountable in ensuring the wellbeing of our students.”
“This is about standing up for hardworking Iowans who are trying to build a better life for themselves and their families,” said Finkenauer. “It’s absolutely unconscionable that predatory institutions would take advantage of these folks. Answering to their Wall Street investors, they promised students a pathway to good jobs and financial security but did everything they could to mislead them and leave them—and taxpayers— on the hook with tens of thousands of dollars of bad loans. That’s not how you treat people and it’s important that we enforce the protections that are on the books so that we can get people the relief they’re owed so they can begin to rebuild their lives.”
“In my nearly two decades as a consumer advocate, I’ve seen time and again what happens when we let predatory institutions run amok with no accountability,” Porter said. “We’ve seen this at Western State Law in the 45th District and at schools across the country—students are getting cheated. It is past time that we get protections in place for Americans trying to access higher education.”
“We have an obligation to protect students from institutions who employ predatory practices,” said Scanlon. “A college degree should not be a debt sentence. These deceptive institutions drag students into debt while providing little to no educational value. This is an issue close to my heart, as Pennsylvania has the highest student debt average in the country. I am proud to co-lead this legislation to provide relief for defrauded students and am grateful to Rep. McBath for her leadership on this issue.”
“Students are taking out tens of thousands of dollars in loans to pay for higher education, with the expectation that their investment will provide them with the tools they need for success,” said Axne. “But when for-profit universities or colleges are knowingly defrauding or misleading students, we have an obligation to hold bad actors accountable and provide relief for student borrowers.”
“Students across Kansas are still dealing with the devastating effects of faulty loans and predatory conduct from for-profit institutions, and it’s time for Congress to take action to protect our students,” Davids said. “I’m glad to join my colleagues to hold the Department of Education accountable and ensure students deceived by these predatory institutions have the opportunity for debt relief.”
“Simply put, safeguards must be in place to protect students from fraudulent colleges and universities,” said Marc Egan, Director of Government Relations, National Education Association (NEA). “The Relief for Defrauded Students Act would enshrine the vital borrower defense protection into law, a regulation that this Administration has attempted to roll back on multiple occasions. NEA is proud to support this legislation.”
“AMVETS is pleased to endorse the borrowers defense bill, because it proposes a means to help tens of thousands of students, including many veterans, return to school and obtain a higher education. We applaud Representatives McBath, Finkenauer, Axne, Davids and Scanlon for their efforts to provide much needed legislative relief,” said Thomas Himes, AMVETS National Legislative Affairs Associate.
“Borrower Defense to Repayment is a way to protect students who were lied to by predatory schools that have a history of taking advantage of underserved student populations,” said Veterans Education Success. “We have seen the impact this type of behavior has on the over 5,000 military-connected students we have provided support to over the years. Veterans Education Success supports this bill.”
The Relief for Defrauded Students Act of 2019 expands on the Higher Education Act of 1965 and strengthens students' ability to receive loan forgiveness if they were misled by a higher education institution. Over 180,000 applications have been filed for debt relief in the last three years. This bill would provide a quicker, fairer process for students to reclaim their loan payments from these institutions.
Rep. McBath spoke in support of the Relief for Defrauded Students Act on the floor of the House of Representatives. Watch her speak here and read a full transcript below:
Today I am proud to introduce the Relief for Defrauded Students Act. This bill would give students the opportunity for a quick and fair process for loan forgiveness against schools that defrauded them.
Borrower’s defense is especially important to me after the closing of Argosy University’s campus in my district this past March. The fifteen-hundred students that were affected were left with incredible debts – but no degree to show for it. Students should focus on getting the quality education they were promised – not worrying about being saddled with large debts from schools that could not and did not deliver on that educational promise.
I am proud to lead the Relief for Defrauded Students Act with my colleagues Reps. Abby Finkenauer, Katie Porter, Cindy Axne, Mary Gay Scanlon, and Sharice Davids. Together we will protect our students and hold these institutions accountable.