Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) joined Senator Dick Durbin (D-Ill.) and Representative Susie Lee (D-Nev.) in introducing a Congressional Review Act (CRA) resolution of disapproval on Department of Education Secretary Betsy DeVos’ rewritten borrower defense rule that gutted essential protections for student borrowers and taxpayers. CRA resolutions of disapproval allow Congress to overturn regulatory actions of federal agencies with a simple majority vote in both chambers. A time for consideration of the resolutions on the floor of each chamber will be coordinated with House and Senate leadership.
“When predatory for-profit colleges abruptly close their doors, they pull the rug out from under students trying to build a better life for themselves and their families. Secretary DeVos’ new rule unfairly penalizes hardworking Nevadans for the actions of fraudulent corporations. I’m proud to join this effort to protect student borrowers and hold for-profit colleges accountable for their actions.”
The DeVos borrower defense rule makes it more difficult for borrowers who are defrauded by their school or harmed by their school’s closure to receive the relief to which they are entitled, and which Congress intended, under the Higher Education Act (HEA). 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 sufficient grounds for a borrower to receive a discharge;
- Eliminates prohibition on class action bans and mandatory arbitration clauses from the 2016 rule—practices used, primarily in the for-profit college industry, to prevent students from suing a school for misconduct in court;
- 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.