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

Floor Speech

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Mrs. LEE of Nevada. Mr. Speaker, pursuant to House Resolution 790, I call up the joint resolution (H.J. Res. 76) providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Department of Education relating to ``Borrower Defense Institutional Accountability'', and ask for its immediate consideration in the House.

The Clerk read the title of the joint resolution.

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Mrs. LEE of Nevada. Res. 76.

Mr. Speaker, I am here today for one reason: to ask that my colleagues in this House stand with me to make clear to the American people that we care more about defending students than enriching predatory schools. That is what my joint resolution, H.J. Res. 76, is all about.

In 1992 Congress added a rule known as borrower defense to the Higher Education Act to give students a legal right to seek forgiveness on their Federal student loans because of fraud by their schools.

Predatory school misconduct in the eighties was so rampant it was painfully clear to Democrats, Republicans, and everyone in between that we need protections in place for students who are scammed and cheated by their institution, and that is just as true today.

Corinthian Colleges, ITT Tech, University of Phoenix, and Dream Center--350,000 students have filed claims alleging they were defrauded by these schools. They were lied to about the job prospects they would get from these schools, they were lied to about the transferability of their credits, and they were lied to about the quality of education they would receive. The only thing they got was a useless degree and a mountain of debt after these schools abruptly closed because of rampant misconduct.

The most painful part is that these are mostly students from low- income communities, people of color, and veterans. These are Americans we should be standing up for, not taking advantage of.

In 2016 the last administration created a new borrower defense rule to streamline the process to help these students.

It sounds pretty good, right?

Not to Betsy DeVos. She then rewrote the borrower defense rule to make it almost impossible for a defrauded student to get relief on their student loans. Even in cases where schools clearly violated the law, the burden of proof on the defrauded student is so absurdly unrealistic that a student would need to hire a team of lawyers to have a shot at proving intent and misconduct from the school.

But the point made by proponents of this borrower defense rule that is most insulting is that the new rule saves taxpayer dollars. That is simply false. The new rule severely weakens the early warning system that ensures predatory schools, not taxpayers, cover the cost of debt relief. As a result in the few cases where relief is rewarded under the DeVos rule, taxpayers will be the ones to foot the bill. Beyond that, the only reason you can say that this rule actually saves money is because we are denying relief to every legitimately defrauded student.

Let me be clear: if Betty DeVos' 2019 borrower defense rule goes into effect, more students will become victims of fraud with no way to climb out of the hole that our government dug for them.

This puts my colleagues in Congress on the record. Members have a choice to make, and if they choose to vote against this resolution, then they will have to go back home and tell thousands of students, veterans, and their constituents in their district that they choose to be on the side of predatory schools over them.

I think the choice is clear.

Ms. FOXX of North Carolina.

Mr. Speaker, I rise today in opposition to H.J. Res. 76, the latest attempt by House Democrats to undermine the Trump administration. It seems these attempts will never end.

Specifically, the resolution would undo the Education Department's efforts to assist students who have been defrauded by colleges and universities while also protecting taxpayer interest.

Any school that has taken advantage of students must be held accountable. Students who have been lied to and suffered financial harm are entitled to relief and forgiveness. We can and should have bipartisan agreement on these points.

Sadly, Democrats have a long track record of pursuing radical ideological objectives at the expense of taxpayers, students, and schools. Today it is clear that my colleagues on the other side of the aisle are more interested in tearing down the Trump administration than providing real solutions.

Before I touch upon the advantages of the Trump administration's new rule, I would like to provide some context on the previous administration's so-called borrower defense rule and its many shortcomings.

The Obama administration's overzealous political actions created a dangerous domino effect. In 2016, during the final months of his Presidency, President Obama implemented a borrower defense regulation that was irresponsible, drastically exceeded the scope of current practice, and came with the shocking price tag for the American taxpayer of $42 billion.

The Obama regulations blurred the line between fraud and inadvertent mistakes made by schools. The difference between the two is critical, Mr. Speaker, because the Education Department can levy significant financial penalties on institutions found to engage in fraud which can cause a school to have to close despite no intentional wrongdoing. Most schools do not have a reckless disregard for the truth.

With this flawed rule in place, many schools could face harsh financial penalties forcing them to close leaving millions of students without access to their higher education opportunity. In fact, several historically Black colleges and universities, HBCUs, wrote to President Obama's Education Secretary John King, Jr., with concerns about Obama's defense rule. Their letter stated:

In fact, the proposed regulation language could undermine the financial viability of a number of academic institutions and could possibly bankrupt less financially secured colleges and universities.

In the end, the Obama regulations created more chaos than clarity and encouraged tens of thousands of borrowers, whether they were harmed or not, to apply to have their loans forgiven. This was nothing more than a political move by the left to provide a backdoor scheme to hand out free education. So it is not surprising that claim filings for loan forgiveness went from 59 in the first 20 years to roughly 300,000 claims submitted in the last 5 years.

President Trump realized quickly that placing a $42 billion burden on the backs of taxpayers was not the answer, and his administration made it a priority to halt the Obama-era regulation from going into effect. The Trump administration worked to instill some common sense into the rulemaking process.

As a result, the administration produced a rule with clearer standards for borrower defense and increased transparency for both students and institutions.

Among other benefits, the new rule makes sure students who have been lied to and suffered financial harm receive relief; reduces the cost of the 2016 Obama-era regulation by $11 billion because it helps students complete their education rather than indiscriminately closing schools; holds all institutions, not just for-profit colleges, accountable for misrepresentation instead of picking winners and losers at considerable cost to taxpayers; ensures due process for all parties; extends the look-back window to qualify for closed school loan discharges from 120 to 180 days, so when schools close more students are eligible for forgiveness; and allows for arbitration which could result in borrowers' recovering resources not provided by the Education Department such as cash payments or other expenses.

The bottom line is this: the Trump administration's borrower defense rule protects student borrowers, holds all higher education institutions accountable, and saves taxpayers $11 billion.

The American people sent us to Washington to work together and solve important issues. Our constituents would be far better served if the Democrat majority used its time to find real solutions to our Nation's issues instead of continuing to lament the 2016 election results.

Republicans stand ready to provide relief to students who have been harmed by fraud, and the borrower defense rules issued by the Trump administration are the answer.

I encourage my colleagues on the other side of the aisle to do away with the political blame game so we can move forward and work in a bipartisan manner to address issues facing America.

Mr. Speaker, I strongly recommend a ``no'' vote on H.J. Res.

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Mrs. LEE of Nevada. Mr. Speaker, may I inquire as to how much time I have remaining.

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Mrs. LEE of Nevada. Mr. Speaker, before I yield, I would like to clarify for the record that this example that was just included by Ms. Foxx was an example that was included in the rule in 2016, and in fact, there were no claims filed under that example.

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I would like to, first, clarify the record that the 60 students who filed claims in the past 20 years is because students didn't understand they had the right to file those claims.

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Mrs. LEE of Nevada. Wild).
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Mrs. LEE of Nevada. Omar).

I would like to clarify that the comments that were just quoted were on the proposed rule, and those issues were fixed.

I yield 1 minute to the gentleman from Maryland (Mr. Trone).

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Mrs. LEE of Nevada. Mr. Speaker, may I inquire how much time remains on each side.
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Mrs. LEE of Nevada. Waters).

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Mrs. LEE of Nevada. DeLauro).

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Mrs. LEE of Nevada. Mr. Speaker, may I inquire how much time remains on my side.

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Mrs. LEE of Nevada. Mr. Speaker, I have no further requests for time and would inquire through the Chair if my colleague has any remaining speakers on her side.

Ms. FOXX of North Carolina. Mr. Speaker, we have no further people to testify. We are ready to close.

Ms. FOXX of North Carolina.

Mr. Speaker, let me say again, the Secretary has been faithfully executing the law. The problem is that our colleagues don't like the law as it is, and so we need to change the law if they don't like what the Secretary is executing. However, that is not where we are today.

Students who have been harmed by fraudulent practices deserve relief, period. There is no disagreement on that issue, Mr. Speaker.

Sadly, President Obama's overzealous and flawed borrower defense regulation abandoned due process and limited student choice. So the Trump administration acted quickly to reverse this struggling regulation.

In 2019, the Education Department issued a new borrower defense rule to better protect borrowers and taxpayers. The rule is the result of more than 2 years of deliberations, public hearings, negotiations with the higher education stakeholders, and considering, incorporating, and responding to public comments on the issues.

To hear our colleagues speak about it, it is something that came straight off of Secretary DeVos' desk. Not true.

Thanks to this regulatory reset, all colleges and universities will be held accountable, defrauded students will see relief, and taxpayer dollars will be better protected.

Today's resolution would repeal the Trump administration's rule and go back to Obama regulations that harm students and taxpayers. That is unreasonable to think about, that our colleagues want to do that. They want to actually harm the students they claim they want to help. Students deserve better.

Mr. Speaker, I urge my colleagues to vote ``no'' on this misguided resolution, and I yield back the balance of my time.

Mr. Speaker, in closing, I would like to correct some misinformation about the 2016 rule that my colleagues on the other side have stated today.

First of all, the law, the Higher Education Act, entitles borrowers a right to relief. This applies to all institutions, not just a few.

The reason the 2019 rule saves money is because meritorious claims will be denied. Under this new rule, students will see only 3 percent of their loans discharged, and predatory institutions will pay only 1 percent of their fraud.

The 2019 rule sets an impossibly high bar for students to prove relief, inconsistent with State law.

The 2016 rule allowed for arbitration. It just banned predispute arbitration and class action waivers.

The 2016 rule was closely negotiated with institutions, including HBCUs, that struck a balance that was fair to institutions and students.

The Department of Education predicts that by 2021 over 200,000 borrowers will face this type of fraud. This is not about borrowers in the past; this is about borrowers moving forward. This number will only continue to grow if we don't pass the reforms in the College Affordability Act.

Mr. Speaker, I include in the Record three letters: a letter from The American Legion; a letter from 20 State attorneys general; and a letter from a coalition of groups, including Student Veterans of America, supporting our effort to overturn the Secretary's harmful borrower defense rule. The American Legion, Office of the National Commander, Washington, DC, December 18, 2019. Hon. Richard Durbin, Washington, DC.

Dear Senator Durbin: On behalf of the nearly 2 million members of The American Legion, I write to express our support for Joint Resolution 56, providing for congressional disapproval of the rule submitted by the Department of Education relating to, ``Borrower Defense Institutional Accountability.'' The rule, as currently written, is fundamentally rigged against defrauded borrowers or student loans, depriving them of the opportunity for debt relief that Congress intended to afford them under the Higher Education Act. Affirming this position is American Legion Resolution No. 82: Preserve Veteran and Servicemember Rights to Gainful Employment and Borrower Defense Protections, adopted in our National Convention 2017.

Thousands of student veterans have been defrauded over the years--promised their credits would transfer when they wouldn't, given false or misleading job placement rates in marketing, promised one educational experience when they were recruited, but given something completely different. This type of deception against our veterans and servicemembers has been a lucrative scam for unscrupulous actors.

As veterans are aggressively targeted due to their service to our country, they must be afforded the right to group relief. The Department of Education's ``Borrower Defense'' rule eliminates this right, forcing veterans to individually prove their claim, share the specific type of financial harm they suffered, and prove the school knowingly made substantial misrepresentations. The preponderance of evidence required for this process is so onerous that the Department of Education itself estimated that only 3 percent of applicants would get relief.

Until every veteran's application for student loan forgiveness has been processed, we will continue to demand fair and timely decisions. The rule that the Department of Education has promulgated flagrantly denies defrauded veterans these dignities, and The American Legion calls on Congress to overturn this regulatory action.

Senator Durbin, The American Legion applauds your leadership in addressing this critical issue facing our nation's veterans and their families. For God & Country, James W. ``Bill'' Oxford, National Commander. ____ The Commonwealth of Massachusetts, Office of the Attorney General, Boston, Massachusetts, January 14, 2020. Senator Dick Durbin, Washington, DC. Representative Susie Lee, Washington, DC.

Dear Senator Durbin and Representative Lee: We, the undersigned Attorneys General of Massachusetts, California, Delaware, the District of Columbia, Hawai'i, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Vermont, Virginia, and Washington write to express our support for the resolution of disapproval that you have introduced regarding the U.S. Department of Education's (``Department'') 2019 Borrower Defense Rule (``2019 Rule'') pursuant to the Congressional Review Act. In issuing the 2019 Rule, the Department has abdicated its Congressionally-mandated responsibility to protect students and taxpayers from the misconduct of unscrupulous schools. The rule provides no realistic prospect for borrowers to discharge their loans when they have been defrauded by predatory for-profit schools, and it eliminates financial responsibility requirements for those same institutions. If this rule goes into effect, the result will be disastrous for students while providing a windfall to abusive schools.

The 2019 Rule squanders and reverses recent progress the Department has made in protecting students from fraud and abuse. Three years ago, the Department completed a thorough rulemaking process addressing borrower defense and financial responsibility, in which the views of numerous schools, stakeholders, and public commenters were considered and incorporated into a comprehensive set of regulations. The regulations, promulgated by the Department in November 2016 (``2016 Rule''), made substantial progress toward achieving the Department's then-stated goal of providing defrauded borrowers with a consistent, clear, fair, and transparent process to seek debt relief. At the same time, the 2016 Rule protected taxpayers by holding schools accountable that engage in misconduct and ensuring that financially troubled schools provide the government with protection against the risks they create.

The Department's new rule would simply rescind and replace its 2016 Rule, reversing all of its enhanced protections for students and its accountability measures for for-profit schools. The Department's 2019 Rule provides an entirely unfair and unworkable process for defrauded students to obtain loan relief and will do nothing to deter and hold accountable schools that cheat their students. Among its numerous flaws, the Department's new rule places insurmountable evidentiary burdens on student borrowers with meritorious claims. The rule requires student borrowers to prove intentional or reckless misconduct on the part of their schools, an extraordinarily demanding standard not consistent with state laws governing liability for unfair and deceptive conduct. Moreover, even where a school has intentionally or recklessly harmed its students, it is difficult to imagine how students would be able to obtain the evidence necessary to prove intent or recklessness for an administrative application to the Department. The rule also inappropriately requires student borrowers to prove financial harm beyond the intrinsic harm caused by incurring federal student loan debt as a result of fraud, and establishes a three-year time bar on borrower defense claims, even though students typically do not learn until years later that they were defrauded by their schools. Compounding these obstacles, the rule arbitrarily eliminates the process by which relief can be sought on a group level, permitting those schools that have committed the most egregious and systemic misconduct to benefit from their wrongdoing at the expense of borrowers with meritorious claims who are unaware of or unable to access relief.

We are uniquely well-situated to understand the devastating effects that the 2019 Rule would have on the lives of student borrowers and their families. State attorneys general serve an important role in the regulation of private, postsecondary institutions. Our investigations and enforcement actions have repeatedly revealed that numerous for-profit schools have deceived and defrauded students, and employed other unlawful tactics to line their coffers with federal student-loan funds. We have witnessed firsthand the heartbreaking devastation to borrowers and their families. Recently, for example, state attorneys general played a critical role in uncovering widespread misconduct at Career Education Corporation, Education Management Corporation, the Art Institute and Argosy schools operated by the Dream Center, ITT Technical Institute, Corinthian Colleges, American Career Institute and others, and then working with the Department to secure borrower-defense relief for tens of thousands of defrauded students. Though this work, we have spoken with numerous students who, while seeking new opportunities for themselves and their families, were lured into programs with the promise of employment opportunities and higher earnings, only to be left with little to show for their efforts aside from unaffordable debt.

A robust and fair borrower defense rule is critical for ensuring that student borrowers and taxpayers are not left bearing the costs of institutional misconduct. The Department's new rule instead empowers predatory for-profit schools and cuts off relief to victimized students. During the comment period on the 2019 Rule, we submitted these and other objections to the Department. Rather than engaging with our offices, the Department ignored our comments and left our concerns unaddressed. We commend and support your efforts to disapprove the 2019 Rule to protect students and taxpayers. Congress must hold predatory institutions accountable for their misconduct and provide relief to defrauded student borrowers and, by enacting your resolution of disapproval, ensure that the 2016 Rule remains the operative borrower defense regulation. Sincerely, Maura Healey, Massachusetts Attorney General; Kathleen Jennings, Delaware Attorney General; Clare E. Connors, Hawai'i Attorney General; Tom Miller, Iowa Attorney General; Brian E. Frosh, Maryland Attorney General; Keith Ellison, Minnesota Attorney General; Hector Balderas, New Mexico Attorney General; Xavier Becorra, California Attorney General; Karl A. Racine, District of Columbia Attorney General; Kwame Raoul, Illinois Attorney General; Aaron M. Frey, Maine Attorney General; Dana Nessel, Michigan Attorney General; Gurbir S. Grewal, New Jersey Attorney General; Letitia James, New York Attorney General; Joshua H. Stein, North Carolina Attorney General; Josh Shapiro, Pennsylvania Attorney General; Mark R. Herring, Virginia Attorney General; Ellen F. Rosenblum, Oregon Attorney General; Thomas J. Donovan, Jr., Vermont Attorney General; Bob Ferguson, Washington State Attorney General. ____ December 9, 2019. Senator Dick Durbin, Washington, DC. Representative Susie Lee, Washington, DC.

Dear Senator Durbin and Representative Lee: As 57 organizations representing and advocating for students, families, taxpayers, veterans and service members, faculty and staff, civil rights and consumers, we write in support of your efforts to disapprove the 2019 Borrower Defense to Repayment rule pursuant to the Congressional Review Act.

The purpose of the borrower defense rule as defined by the Higher Education Act is to protect students and taxpayers from fraud, deception, and other illegal misconduct by unscrupulous colleges. A well-designed rule will both provide relief to students who have been lied to and cheated, and deter illegal conduct by colleges.

However, the final rule issued by the Department of Education on September 23, 2019, would accomplish neither of these goals. An analysis of the Department's own calculations estimates that only 3 percent of the loans that result from school misconduct would be cancelled under the new rule. Schools would be held accountable for reimbursing taxpayers for just 1 percent of these loans.

The DeVos Borrower Defense rule issued in September imposes unreasonable time limits on student borrowers who have been deceived and misled by their schools. It requires applicants to meet thresholds that make it almost impossible for wronged borrowers to obtain loan cancellation.

The rule eliminates the ability of groups of borrowers to be granted relief, even in cases where there is substantial compelling evidence of widespread wrongdoing. It prohibits the filing of claims after three years even when evidence of wrongdoing emerges at a later date. It requires borrowers to prove schools intended to deceive them or acted recklessly, although students have no ability to access evidence that might show this intent. And the rule stipulates that student loans taken by students under false pretenses are insufficient evidence of financial harm to allow the loans to be cancelled.

Additionally, the 2019 rule eliminates the promise of automatic loan relief to eligible students whose school closed before they could graduate. Instead, the Department would force each eligible student impacted by a school closure to individually find out about their statutory right to relief, apply, and navigate the government's bureaucracy to have their loans cancelled.

Many of us wrote to the Department in August 2018 in response to the notice of proposed rulemaking and offered carefully considered recommendations. However, the Department rejected our recommendations that would have provided a fair process that protects students and taxpayer dollars. Instead, the new rule would do little to provide relief to students who have been lied to, and even less to dissuade colleges from systematically engaging in deceptive and illegal recruitment tactics. Moreover, a borrower defense rule that fails to adequately protect students harms the most vulnerable students, including first-generation college students, Black and Latino students, and military-connected students, who are targeted by and disproportionately enroll in predatory for-profit colleges.

Meanwhile, the Department refuses to take action on a massive backlog of over 200,000 pending borrower defense claims, having failed to approve or deny a single claim in over a year. We fully support your effort to repeal the 2019 borrower defense rule, and look forward to restoration of the 2016 rule, which took major steps to provide a path to loan forgiveness for the hundreds of thousands of students who attended schools where misconduct has already been well documented. Signed,

AFL-CIO, AFSCME, Allied Progress, American Association of University Professors, American Federation of Teachers, Americans for Financial Reform, Association of Young Americans (AYA), Campaign for America's Future, Center for Public Interest Law, Center for Responsible Lending, Children's Advocacy Institute, CLASP, Clearinghouse on Women's Issues, Consumer Action, Consumer Advocacy and Protection Society (CAPS) at Berkeley Law, Consumer Federation of America, Consumer Federal of California.

Demos, Duke Consumer Rights Project, East Bay Community Law Center, Economic Mobility Pathways (EMPath), The Education Trust, Empire Justice Center, Feminist Majority Foundation, Government Accountability Project, Higher Education Loan Coalition (HELC), Hildreth Institute, Housing and Economic Rights Advocates, The Institute for College Access & Success (TICAS), Maryland Consumer Rights Coalition, NAACP, National Association for College Admission Counseling.

National Association of Consumer Advocates, National Association of Consumer Bankruptcy Attorneys (NACBA), National Consumer Law Center (on behalf of its low-income clients), National Education Association, National Urban League, New America Higher Education Program, New Jersey Citizen Action, One Wisconsin Now, PHENOM (Public Higher Education Network of Massachusetts), Project on Predatory Student Lending, Public Citizen, Public Counsel.

Public Good Law Center, Public Law Center, Service Employees International Union (SEIU), Southeast Asia Resource Action Center (SEARAC), Student Debt Crisis, Student Defense, Student Veterans of America, Third Way, U.S. Public Interest Research Group (PIRG), UnidosUS, Veterans Education Success, Veterans for Common Sense, Young Invincibles.

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Mrs. LEE of Nevada. Mr. Speaker, I urge my colleagues to support H.J. Res. 76 and to reject Secretary DeVos' harmful rule that makes it nearly impossible for borrowers to seek the relief that they have the right to seek.

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Mrs. LEE of Nevada. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

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