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Senate Rejects DeVos’ 2019 Harmful Student Loan Debt Rule

Wednesday, March 11, 2020

If approved by the President, the Obama-Era 2016 Borrower Defense rule would stay in effect and provide relief for students defrauded by for-profit colleges

WASHINGTON, D.C. – Today, through a Congressional Review Act (CRA) resolution, the U.S. Senate voted to invalidate U.S. Secretary of Education Betsy DeVos’ 2019 harmful Borrower Defense (BD) Rule, scheduled to go into effect this summer. If the President signs the CRA resolution, it would void DeVos’ BD rule and leave in effect the 2016 Obama Administration BD rule, which would continue its purpose of providing relief for students defrauded by for-profit colleges.

The 2019 BD rule, which would take effect on July 1, insulates predatory for-profit colleges from accountability, prevents defrauded students from accessing relief, and makes it harder for taxpayers to recover from the losses caused by the abusive behavior of bad institutional actors.

Yesterday, the Department of Veteran’s Affairs (VA) announced that it will no longer fund future GI Bill enrollees at five institutions, including the large for-profit University of Phoenix, due to widespread issues of deception and misrepresentation.

The Trump Administration has threatened to veto the resolution.

Center for Responsible Lending Federal Advocacy Director Ashley Harrington released the following statement:

We commend Senator Dick Durbin and the bi-partisan members from both chambers for overturning a rule that would have allowed students and taxpayers to be ripped off by for-profit colleges.

The President should sign this resolution to protect student borrowers and the public from the harms of predatory institutions like ITT Tech and Corinthian Colleges. These for-profit colleges engaged in numerous harmful practices and then abruptly closed their doors, leaving tens thousands of students in debt without a degree and useless credentials. Currently, more than 217,000 borrowers, many former students of ITT Tech and Corinthian, are still waiting for the relief to which they are entitled.

The Department of Education should implement the 2016 rule and provide relief to borrowers who have been defrauded by their institutions and ensure accountability for predatory for-profit colleges that prey on students of color, low-income borrowers, veterans, women, and older Americans. As the VA’s important action yesterday showed, these harmful acts did not end with the closings of these institutions. Continued enforcement and oversight are greatly needed.

We also encourage Congress to advance a comprehensive reauthorization of the Higher Education Act that holds true to its original values by opening the doors of higher education to low-income students and students of color. We need a higher education system that is truly affordable, reducing the need for students to borrow for college, and provides a pathway out of student debt and into economic security.


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