[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

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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.

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       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.