House Democrats have not overridden President Donald Trump’s veto of a measure that would have reversed the Department of Education’s harsh policy on forgiving student loans cheated by for-profit universities
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On Friday, House Democrats did not override President Donald Trump’s veto of a measure that would have reversed the Department of Education’s tough policy on forgiving student loans cheated by for-profit universities.
The House voted 238-173 in support of the annulment measure, falling below the two-thirds majority necessary to send it to the Senate.
It is a victory for Education Secretary Betsy DeVos, whose policy on student loan forgiveness was in jeopardy after Congress voted to reverse it in March. It now remains in place and will take effect on July 1.
The measure passed by Congress in March would have restored a 2016 rule created by the Obama administration. The measure was passed using the Congressional Review Act, which allows Congress to repeal federal rules with a simple majority vote from both houses and the approval of the president.
While the original measure had bipartisan support, only six Republicans voted to override the veto, while 172 opposed it.
In calling for the cancellation, Democrats said DeVos’ rule made it almost impossible for cheated students to pay off their loans. She was accused of stacking the rules in favor of the for-profit university industry, which has found an ally in the Trump administration.
But Republicans said the DeVos government is an improvement over Obama-era policy, which they say granted loan repayments too easily.
“Mass loan forgiveness has long been a Democratic goal and the Obama rule was a great leap toward that goal. One that also ignored the high cost to taxpayers, ”said Rep. Virginia Foxx, RN.C., the Republican on the House education committee.
The dispute stems from a policy known as a borrower’s defense for repayment, which allows borrowers to erase their federal student loans if their universities lied to enroll.
The rule was created in the 1990s, but was expanded under President Barack Obama after the collapse of Corinthian Colleges and other for-profit universities that closed. Authorities said they made false claims about the success of their graduates.
Students could obtain forgiven loans under the Obama era rule if there was evidence of misrepresentation or breach of contract by the university. In cases of widespread fraud, entire groups of students could obtain loans repaid under a single claim.
But DeVos stopped the policy before it went into effect, saying it made it too easy for loans to be forgiven. Last year, DeVos replaced it with a new policy that she says protects taxpayers and universities from frivolous claims.
His rule sets a higher bar for claims, requiring borrowers to demonstrate that their schools knowingly cheated on them and caused personal financial harm. It also sets a time limit for claims, giving students up to three years after graduation or retirement.
Other changes include the elimination of group claims, and DeVos finalized a provision that automatically canceled loans for students who attended schools that closed before they could graduate.
Her policy was backed by Republicans and lobbyists for the for-profit college industry, which she argues was unfairly targeted by the Obama administration. However, Democrats and consumer advocates say the rule removes protections for defrauded students.
The Institute for University Access and Success said Friday that the rule will leave many disappointed students stuck in their loan payments.
“The rule creates obstacles for disappointed students in the midst of an economic and public health crisis, while imposing no consequences for misleading universities,” said James Kvaal, president of the nonprofit organization.
DeVos has faced strong criticism from Democrats for his handling of politics and an accumulation of loan cancellation claims. In April, DeVos said it would process more than 170,000 claims as part of a settlement in a lawsuit alleging that it illegally halted the process while rewriting the rule.
As of April 30, the agency said it had 130,000 pending claims out of a total of 318,000 requests received.
DeVos separately changed the policy to provide partial loan relief to many students. Their update provides full downloads only if students attended programs that produce graduates with average earnings well below those of graduates in similar programs. Other students get parts of their loans erased. Consumer groups filed a lawsuit challenging the rule in June.