08.02.16

Baldwin, Senate Dems: More to Do to Further Strengthen Education Dept. Rule For Debt Relief in Higher Education

The proposed “borrower defense” rule would create strong protections for student borrowers following cases of institutions, like Corinthian Colleges, who engaged in unlawful and abusive practices 

Nearing a final rule, 20 Senators push Education Dept. to “close unintended loopholes, increase accountability to students, and reduce the complexity of the regulation” 

WASHINGTON, D.C U.S. Senator Tammy Baldwin, a Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, joined a group of 19 Senators in sending a letter to the Department of Education (“the Department”) to express support for the proposed “borrower defense” rule and to suggest a number of ways to strengthen the rule to protect students who have been the victims of unlawful, unfair, deceptive, or abusive practices in higher education. In its current form, the rule significantly improves the process for these students to have their federal loans discharged, crucially bans mandatory arbitration clauses, and provides a path to more automatic relief for groups of students that have been harmed.

“We thank the Department for issuing a strong proposed borrower defense rule to provide relief to students and protect taxpayers,” wrote the Senators. “Many of the current elements of the rule are a real victory for students and should be retained. However… we believe there are areas in which the proposed rule could be improved to close unintended loopholes, increase accountability to students, and reduce the complexity of the regulation.”

In the letter, led by Senator Patty Murray (D-WA), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, the Senators urge the Department to “close unintended loopholes, increase accountability to students, and reduce the complexity of the regulation.” Specifically, the Senators are calling for a stronger “group relief” approach when reviewing borrower defense claims and discharging loans, acknowledgment of cases of college misconduct investigated by State Attorneys General and other law enforcement agencies, clearer guidelines to fully enforce the ban on mandatory arbitration clauses already included in the rule, and much more. Critically, the final rule should also reflect the Department’s clear legal authority to “cover all students and all claims related to the making of a loan or the provision of educational services, not just those that could ultimately become part of a borrower defense proceeding.”

The list of Senators signing the letter include: Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Bob Casey (D-PA), Richard J. Durbin (D-IL), Al Franken (D-MN), Kirsten Gillibrand (D-NY), Patrick Leahy (D-VT), Edward Markey (D-MA), Barbara A. Mikulski (D-MD), Chris Murphy (D-CT), Patty Murray (D-WA), Jack Reed (D-RI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Debbie Stabenow (D-MI), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).

This effort follows a series of requests from Senate Democrats, supported by Baldwin, to strengthen college accountability and protect students using the Administration’s authority under the Higher Education Act. Senate Democrats’ efforts to improve college accountability began in April with a push to hold college accreditors responsible, and the Department took steps toward that goal when it issued a staff recommendation last month to terminate the recognition of the Accrediting Council for Independent Colleges and Schools (ACICS). In June, Senate Democrats called for action to protect servicemembers and veterans through a strengthened 90/10 rule. And most recently in July, Senate Democrats sent a letter to the U.S. Department of Veterans Affairs (VA) calling for strengthened “oversight, enforcement, and accountability” of colleges receiving Post-9/11 GI Bill benefits.

A copy of the letter is available here