[Congressional Record Volume 165, Number 199 (Thursday, December 12, 2019)]
[Senate]
[Pages S7003-S7005]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
For-Profit Colleges and Universities
Madam President, it is the holiday season, and many families are
gathering at special meals, giving gifts, with a lot of fond memories,
but instead of celebrating, hundreds of thousands of people across
America who have been defrauded by for-profit colleges and universities
are just trying to get by. There will not be many presents that they
will be able to give or probably receive. They have been waiting day in
and day out for one person to make a decision. Her name is Betsy DeVos.
She is the Secretary of Education. She can provide them relief from
their federal student loans that they desperately need, but she refuses
to do it.
After being lured with false promises, these people I am talking
about ended up in programs at for-profit colleges and universities. Who
were the for-profits? See if these names ring a bell: Corinthian, ITT
Tech, Westwood, DeVry, University of Phoenix, Dream Center. These are
for-profit colleges and universities, and these student borrowers were
left with mountains of debt, worthless credits, and diplomas that
employers laugh at when it was all said and done. Now, Secretary DeVos
refuses to provide these students with relief from their student loan
debt to which they are entitled under the borrower defense provision of
the Higher Education Act.
Take Rachel from Missouri who attended Corinthian's Everest College.
She says, ``I am not able to buy my children clothes or shoes.''
Pamela from South Carolina owes $140,000 after attending the corrupt
ITT Tech for-profit school. Here is what she says: ``I have an autistic
daughter that depends on me, and I can't afford to get a decent place
to live or buy the things she needs.'' Is that any surprise with
$140,000 in debt from one of these corrupt for-profit colleges?
Jennifer, who attended the Illinois Institute of Art--not to be mixed
up
[[Page S7004]]
with the Illinois Art Institute, a reputable institution--but the
Illinois Institute of Art where she attended, she owes $67,800 in
Federal student loans, and she says, ``The stress and anxiety of
working 3 jobs to make a living to pay off these loans, feed my kids,
and keep a roof over my head, is exhausting.''
For borrowers like Rachel, Pamela, and Jennifer, Secretary DeVos
might as well be Secretary Scrooge this holiday season. She continues
to deny them a fresh start. She continues to refuse to apply the
borrowed defense provision which would allow the discharge of their
federal student debt. More than 200,000 borrowers find themselves in
similar positions, while Secretary DeVos lets claims back up at the
Department. She has failed to approve a single claim in more than a
year, not one for all these hundreds of thousands of students facing
this fraudulent debt.
Why we should give them a break? Why should they have any forgiveness
for student debt? Let me tell you why. It is because it starts with the
U.S. Federal Government Department of Education recognizing the
accreditation of these institutions--these worthless institutions. That
accreditation says to students applying there: This is a real college.
Well, it turns out that they weren't real colleges and universities.
But they were real when it came to costs. Some of the most expensive
places to attend higher education in America are these for-profit
colleges and universities.
What kind of record do they have? Well, consider this: just nine
percent of all postsecondary students in America go to these for-profit
colleges and universities--nine percent. This will be on the final, for
the students who are listening. Nine percent go to for-profit colleges
and universities. Thirty-three percent of all the federal student loan
defaults are from students at for-profit colleges and universities.
What does that tell you? Well, if I go to one of these schools, I am
going to rack up a lot of debt. Maybe I will not be able to find a job;
maybe I will not even be able to finish school; and then I learn my
credits aren't even transferable from a for-profit school to a real
college or university.
It all started with the U.S. Federal Government recognizing the
accreditation of these schools, saying ``These are real schools,'' with
the students depending on that accreditation. Then they backed it up,
saying: Oh, incidentally, you can borrow money from the Federal
Government to go to these real schools. Then, when these schools went
bankrupt, when they defrauded everyone in sight, when they were sued by
the State attorneys general and other federal agencies, when it turned
out they were big frauds and the students saw the schools crumble in
front of them, the students ended up with the debt.
We say, under the law, that the Federal Government has some
responsibility. We should have done a better job of overseeing these
schools.
That isn't the way Secretary DeVos sees it. As far as she is
concerned, these kids are on their own. They are not kids anymore. They
have been hanging on to their student debt for so long, they don't know
which way to turn.
Despite Secretary DeVos's excuses, the reality is that nothing is
legally preventing her from providing borrower defense discharges to
these students for the loans they took out at these for-profit colleges
and universities. She could do it tomorrow. She could clear the backlog
quickly, if she wanted to.
We know using her legal authority to provide relief to defrauded
borrowers gives her ``extreme displeasure''. We know that because she
wrote that in an order she issued for the Department. She was extremely
displeased to discharge the student loans of these students who had
been defrauded by for-profit schools.
Well, I am not surprised. She surrounded herself at the Department of
Education with people from that industry who believe that the industry
has done no wrong. We know better.
We also know from her previous statements that Secretary DeVos thinks
many borrowers got some value from their experience, even though they
were defrauded into massive debt. She thinks these borrowers are just
after ``free money,'' and they don't deserve a full discharge.
Yesterday, National Public Radio released a series of internal
Department memos showing that the facts don't back up Secretary DeVos's
claims.
Back in 2017, the Department staff concluded that ``the value of an
ITT [Tech] education--like Corinthian--is likely either negligible or
nonexistent.''
This was a school whose accreditation was recognized by our Federal
Government, Secretary DeVos, and it has turned out to be worthless. The
memo went on to conclude, ``Accordingly, it is appropriate, for the
Department to award eligible borrowers full relief.'' I agree. It is
reasonable for the Department of Education to try to make amends for
this miserable failure of oversight of these schools and to give these
student borrowers a chance.
Nonetheless, this week, Secretary DeVos announced a new scheme to use
something called gainful employment earnings data to deny defrauded
student borrowers full discharges. Remember, that the gainful
employment rule was meant to ensure that programs were actually
preparing students for jobs after graduation. But Secretary DeVos
delayed and then eliminated the rule. Now, instead of using gainful
employment data to hold poor-performing programs accountable, she wants
to use it to punish defrauded student borrowers. She has already tried
it once, only to be told by a Federal judge that what she did was
illegal.
While it is unclear if this slightly tweaked version of the scheme
will pass legal muster, the result for the borrowers would be the same:
ultimate denial in terms of full relief from their student loans from
miserable for-profit schools.
Not only is Secretary DeVos delaying and denying relief for
previously defrauded borrowers, she is rewriting the rules to make it
almost impossible for future defrauded borrowers to get relief. She
continues to recognize the accreditation of these unworthy
institutions. She continues to say to the United States and the world:
These are perfectly good schools. Then, when it turns out they are
perfectly awful, she wants to accept no responsibility.
She released a new version of the borrower defense rule just a few
months ago that places unreasonable burdens on borrowers, way beyond
their capacity to detect the fraud being perpetrated at the time. The
net result is this: According to The Institute for College Access and
Success, the new DeVos rule will cancel just 3 percent of all loans
associated with misconduct. She is going to cancel 3 percent.
In September, I introduced a resolution in the Senate to overturn the
DeVos borrower defense rule. Forty-two of my colleagues have joined me.
I plan to bring it to a vote on the Senate floor, where it needs a
simple majority to pass.
Just this week, 57 student, veteran, and consumer organizations
released a letter supporting the resolution. I ask unanimous consent
that it be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
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.
[[Page S7005]]
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 Federation 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.
Mr. DURBIN. Among the organizations supporting the resolution are the
American Federation of Teachers, the Center for Responsible Lending,
the Consumer Federation of America, the Education Trust, the National
Association of College Admission Counseling, the NAACP, the National
Education Association, the Student Veterans of America, and the
American Legion on behalf of American veterans who have been victims of
this fraud as well.
When our resolution comes to the floor, I hope a handful of my
Republican colleagues will take a look at it and realize that we have
to give these students a second chance at their lives. We misled them
into attending for-profit schools that were worthless. The schools
defrauded them. They ended up with a debt to our government, and under
the provisions of the Higher Education Act, that debt can be forgiven.
Let's give these defrauded student borrowers a second chance.
Ultimately, they deserve an opportunity from our government to have a
better holiday coming before them and a better life ahead.
I yield the floor.
The PRESIDING OFFICER (Mr. Scott of Florida). The Senator from Ohio.