Sandy Springs, G.A. – On Thursday, Rep. Lucy McBath (GA-06) joined her colleagues in supporting a bipartisan joint resolution to overturn a U.S. Department of Education rule gutting essential protections for student borrowers and placing responsibility for loan repayment in case of school misconduct on taxpayers, not on fraudulent institutions. The House of Representatives passed Congressional Review Act (CRA) Resolution H.J.Res. 76 to protect students, veterans, and taxpayers on a bipartisan vote with 6 Republican members voting in support.
“So many of our students work hard every day to earn an education and chase after their dreams,” McBath said. “In my own district, Argosy University ripped off hundreds of kids, leaving them with untransferable credits, huge amounts of student debt, and degrees that aren’t worth anything. Our kids should be leaving school ready for success, not paying for the misconduct of predatory institutions. We stood up to protect students and veterans from these predatory institutions.”
It has been reported that roughly 240,000 borrowers still have claims pending with the Department, including tens of thousands of students and veterans living in Georgia. Student advocacy groups and veterans organizations have expressed concern over the high number of veterans and students from low-income communities who have been defrauded by fraudulent institutions and closures, left with depleted GI or veterans benefits and high amounts of debt for pursuing a higher education.
The DeVos borrower defense rule makes it more difficult for borrowers who are defrauded by their school or harmed by its closure to receive the relief to which they are entitled, and which Congress intended. Specifically, the DeVos rule:
- Cuts $11.1 billion in expected relief to students compared to the 2016 rule, currently in effect, by making it more difficult for borrowers to obtain relief;
- Increases the burden on defrauded borrowers to gather and submit, often impossible to obtain, evidence to prove their claim including that the school intentionally harmed them;
- Requires borrowers to apply individually for relief rather than receiving automatic discharges when a group of borrowers has been harmed by widespread fraud or misconduct;
- Establishes a statute of limitations on claims—expiring 3 years after leaving school—despite the fact that a school’s misconduct often doesn’t become known until many years after it;
- Eliminates judgments against a school for misconduct as a sufficient ground for a borrower to receive a discharge;
- Eliminates ability for borrower whose claims are denied from having their claims reconsidered with new evidence;
- Eliminates automatic closed school discharge provision from the 2016 rule for schools that close after July 1, 2020—provision requires automatic discharge of loans for any borrower who has not enrolled in another Title IV program within three years of the school’s closure.
H.J. Res. 76, led by Rep. Susie Lee (NV-03), is the first use by Democrats in the House of the Congressional Review Act (5 U.S.C. §801-808), which gives Congress the authority to overturn rules put in place by federal agencies.