[Congressional Record Volume 166, Number 9 (Wednesday, January 15, 2020)]
[Senate]
[Pages S203-S205]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FOR-PROFIT COLLEGES AND UNIVERSITIES

  Mr. DURBIN. Mr. President, this week the House of Representatives 
will have the opportunity to stand up for student borrowers who have 
been defrauded by the schools they attended. The House of 
Representatives will be voting on a resolution introduced by 
Representative Susie Lee of Nevada which will allow defrauded student 
loan borrowers relief from their student debt.
  Under the Higher Education Act, currently the law of the land, when a 
student borrower is defrauded by their school, they are entitled to 
have their Federal student loans to attend that school discharged. That 
is what Congress intended. Why? The logic behind it is very 
straightforward.
  Consider the following: The Federal Government recognizes the 
accreditation of these schools, colleges, and universities. That 
accreditation authorizes these schools to offer loans from the Federal 
Government to pay for the cost of attending. It is a very 
straightforward process. The schools are accredited. The U.S. 
Government recognizes the accreditation which authorizes the school to 
offer courses to students, and then it goes on to say that students 
attending those colleges and universities will qualify for Federal 
student loans. Now, that is where this particular statement I am about 
to make becomes particularly relevant.
  The school makes promises about the education they are going to offer 
to the students to entice them to attend and to borrow money to attend. 
For example, the school may tell the students that the credits they 
earn at this school can be transferred to other schools, but sometimes 
that turns out to be untrue and false. These schools may tell the 
students there are jobs waiting for them in the fields that they want 
them to study at the schools. They tell them that, after graduation, 
there are plenty of employment opportunities, and oftentimes that turns 
out to be untrue. In fact, in the case of some of these schools, they 
have deliberately misrepresented the job placement of graduates to 
create the impression of success if you complete a course. The schools 
are lying to the students.
  The school may also promise that, if you complete a course at the 
school, you will automatically be qualified for certain certifications 
under State law. Sometimes that turns out to be a lie. They may also 
tell the students there are certain teachers and courses available to 
them if they pay their tuition, and that may turn out to be untrue as 
well.
  The law I referred to earlier is intended, when these types of lies 
and misrepresentations occur and the student is misled into borrowing 
Federal student loans based on these misrepresentations, to give the 
defrauded student the right to be relieved of the student loan 
responsibility under the law.

[[Page S204]]

It makes sense. If the student is lied to, takes out a Federal loan, 
and it turns out the school lied to them and defrauded them, we don't 
want the students saddled with a loan from that school that could 
literally change their lives.
  Now we have a new Secretary of Education under President Trump, Betsy 
DeVos. She has decided to rewrite the rules when it comes to these 
students receiving relief from the fraud I have just described. She 
places burdens on these students that we have not seen before. 
Basically, she is saying to the students: Lawyer up. You just can't 
make your plea to the Department of Education that you, along with a 
group of other students, were defrauded by representations in the 
materials they distributed or the statements they made--not good enough 
under the new rule written by Secretary DeVos. What she has basically 
said is that each one of these students now has an individual 
responsibility to prove that that student was defrauded, that there was 
a representation to that student as opposed to it being made by the 
school to all of the students or in its publications and the like.
  The burdens which Secretary DeVos now places on defrauded students 
have led to estimates that only 3 percent of the students who have been 
defrauded can possibly expect to receive relief from their student 
debt--3 percent. You might say: Well, these things happen. It is a 
``buyer beware'' market. Students ought to know better. Really?
  When the Federal Government recognizes an accredited school and says 
to that school: You can offer Federal student loans, do we not bear 
some responsibility to the student and the family if that school lies 
and misrepresents facts to the students? Well, 78 percent of Americans 
happen to think, yes, we don't want to have students in a predicament 
where their own futures are going to be somehow compromised because of 
the fraud by the school.
  How many students are affected by this? A handful? No. It turns out, 
a dramatically large number. Over the last decade, tens of thousands of 
college students in America have been defrauded in ways I just 
described, lured into enrolling in classes with false promises and 
aggressive tactics, only to be left with massive student debt and a 
worthless education and no job. Sadly, it is a common occurrence in the 
for-profit college industry. That industry, the for-profit college 
industry, is an industry that can be best described by two numbers. 
Nine percent of postsecondary students are enrolled in for-profit 
colleges and universities in America. Think about the University of 
Phoenix, DeVry, and others. Nine percent of students end up in schools 
like that. Yet 33 percent of all the federal student loan defaults are 
students from these for-profit colleges and universities--9 percent of 
the students, 33 percent of the student loan defaults. Why? The tuition 
is too high; the education is virtually worthless; and there are no 
jobs at the end of the rainbow.
  Some of these schools--for-profit colleges like Corinthian, ITT Tech, 
Westwood, Dream Center--preyed on students, reaped huge profits, and 
then conveniently went bankrupt. They may be gone, legally gone, but 
the debts for the students still live. Others, such as Ashford, 
University of Phoenix, Career Education Corporation, are still out 
there doing business. Virtually, all of these notorious schools have 
been the subject of multiple State and local investigations or lawsuits 
for unfair, deceptive, and abusive practices. Unfortunately, they 
continue to create more student victims due to the lack of enforcement 
by our own U.S. Department of Education and loopholes in the laws, 
which, sadly, Congress has been unable or unwilling to close.

  Currently, there are more than 223,000 claims made by students of 
being defrauded and seeking relief under the Higher Education Act--over 
200,000 student borrowers whose lives have been collared by student 
loan debt from these worthless, defrauding schools.
  The claims--223,000 of them--come from every State in the Union, big 
and small, red, blue, and purple. There are over 11,000 from my State 
of Illinois; over 19,000 from the State of Florida; 7,800 from Ohio; 
6,100 from North Carolina; 3,800 from Colorado; 1,000 from the State of 
West Virginia; 385 in Maine; and more than 200 in Alaska.
  The American people believe these defrauded student borrowers and 
future defrauded borrowers deserve help. According to a poll by New 
America, 78 percent of Americans believe students should have their 
Federal student loans forgiven if their schools defrauded them. That 
includes 87 percent of Democrats and 71 percent of Republicans who feel 
that way.
  This new rule by Secretary DeVos would not allow borrowers to receive 
the Federal student loan discharge currently in the law. It is why more 
than 60 organizations are supporting the resolution, which the House 
will vote on this week, and the companion resolution I have introduced 
in the Senate.
  Among those supporting our effort are the American Federation of 
Teachers, the National Education Association, the Student Veterans of 
America--and one that I want to highlight.
  I see there are others on the floor preparing to speak, so I am going 
to abbreviate my remarks, but I want to make one last point.
  Among the groups supporting our efforts to undo the borrower defense 
rule, promulgated by Secretary of Education DeVos, is the American 
Legion. The American Legion sent me a letter last month, and, in 
support of our effort to undo the DeVos rule, they said, among other 
things, that the rule is fundamentally unfair to veterans. Listen to 
what they say about the plight of veterans having been defrauded by 
schools, trying to get relief from their loans. This is from James 
``Bill'' Oxford, national commander of the American Legion. He writes:

       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.

  Mr. President, I ask unanimous consent to have printed in the Record 
the letter dated December 18, 2019.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                          The American Legion,

                                Washington, DC, December 18, 2019.
     Hon. Richard Durbin,
     Senate Dirksen Office Building,
     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 of 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 American Legion.


[[Page S205]]


  

  Mr. DURBIN. Mr. President, I have an additional letter from 20 State 
attorneys general led by the Commonwealth of Massachusetts Office of 
the Attorney General. I ask unanimous consent to have printed in the 
Record the letter dated January 14, 2020.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         The Commonwealth of Massachusetts, Office of the Attorney 
           General,
                                     Boston, MA, 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 20l6 
     (``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 typicaJiy 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,
         Maurn 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 Becerra, 
           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.

  Mr. DURBIN. Mr. President, along with Attorney General Kwame Raoul of 
Illinois and others, signers include the attorneys general of Maine, 
Iowa, Pennsylvania, and North Carolina. In their letter, these chief 
state law enforcement officers write:

       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 . . . if this rule goes into 
     effect, the result will be disastrous for students while 
     providing a windfall to abusive schools.

  Senators are going to get a chance--Democrats and Republicans--to 
undo the mess created by the Secretary of Education. Senators will get 
a chance to stand up for the student loan borrowers who have been 
defrauded and, equally important, a chance to stand up for our 
veterans. How many speeches have been delivered on this floor about the 
men and women in uniform and those who have served and how much we 
honor them? Honor them by standing with the American Legion and vote to 
undo the borrower defense rule of Secretary DeVos.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Sasse). The majority whip.

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