Providing for Congressional Disapproval of Rule Submitted By Department of Education Relating to ``Borrower Defense Institutional Accountability''

Floor Speech

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Ms. OMAR. Mr. Speaker, I rise to oppose the implementation of the harmful DeVos/Trump borrower defense regulation.

Instead of working on behalf of students, Secretary DeVos is enriching predatory for-profit colleges that leave students with crushing debt. Instead of creating a streamlined process to help defrauded borrowers access relief and move forward with their lives, this administration has given dishonest schools new tools they can use to keep taking advantage of students.

In my district in 2016, the courts found that the Minnesota School of Business and Globe University engaged in consumer fraud and purposely deceived more than 1,000 Minnesota students who were systematically misled to believe that they would obtain a degree and credits that were essentially meaningless, losing not only $33.8 million, but also their time and countless opportunities.

It is the government's duty to look out for those victimized students and to make sure they don't continue to suffer at the hands of the greedy institutions that took advantage of them.

Secretary DeVos should be ashamed of herself for failing to uphold that duty and for once again putting profit over people.

Mr. Speaker, I urge my colleagues to join me in supporting this resolution.

Ms. FOXX of North Carolina.

Mr. Speaker, the 2016 borrower defense regulation does a great disservice to our Nation's students and institutions of post-secondary education because the previous administration did not design the borrower defense rule to improve post-secondary education.

Let me explain. The Higher Education Act establishes that a borrower can receive loan forgiveness if he or she attends an institution that engages in an act or omission which led the individual to borrow a loan. An example of an act or omission could be an institution lying about its graduation rates in order to lure more students to enroll in that program. That seems fair.

It is important to note that in the 2019 rule, students who suffer financial harm from fraudulent institutions are eligible and will receive loan relief. But where the Obama administration went haywire was when they blurred the distinction between what acts or omissions constitute fraud versus an inadvertent mistake.

Many institutions, including HBCUs and public flagship universities, were concerned that a single marketing error could set off a domino effect of borrowers seeking and receiving forgiveness.

For example, in a New York Times article published in 2018, Henry N. Tisdale, the President of the small campus of Claflin University in Orangeburg, South Carolina, expressed concern over the Obama-era regulation. Mr. Tisdale said, ``A small mistake or error at a college like Claflin could put us out of business. We don't have the resources ready to respond to frivolous claims.''

Claflin University is just one of the many small, nonprofit institutions that serve low-income, minority, and first-generation students that have become at risk due to the Obama-era rules. Institutions like these would be on the hook for debt and could close due to financial pressures. This would deny students their education, act as an economic drain on the community benefiting from the institution's business, and harm taxpayers who may ultimately be responsible to pay off the loans.

It is reasonable to conclude that the Obama administration's borrower defense rule could be the deciding factor in colleges prematurely closing. In fact, the Obama administration estimated it would have the effect of closing many institutions, which is why their rule is projected to cost over $40 billion in 10 years. Luckily, the Trump administration acted quickly to correct the rule.

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