March 12, 2020
Lawmakers Rebuke DeVos on Borrower Defenses to Repayment Rule
The Senate has joined the House Representatives in passing legislation to terminate the Trump Administration’s borrower defenses to repayment rule, which was published in final form by the Department of Education in September 2019. The passage of the legislation by Congress is seen as a major rebuke to Secretary Betsy DeVos and the Trump Administration, magnified by the ten Republican Senators who joined with their Democratic colleagues to pass the bill.
President Trump is expected to veto the legislation, and Congress is unlikely to have enough votes to override the presidential action. Should Congress fail to override President Trump’s likely veto, the Trump Administration’s regulations will go into effect on July 1, 2020.
While passage of the legislation was an expected development in the House, the defection of so many Republicans in the Senate was unexpected.
The Trump Administration’s regulations have been controversial on Capitol Hill for the relatively limited relief offered to defrauded students, especially when compared to the much more student-friendly regulations published by the Obama Administration. Secretary DeVos was grilled by Congress at a hearing last December regarding the scope and implementation of the Department’s borrower defenses plan.
The borrower defenses to repayment process originated during the Clinton Administration in the mid-1990s. Following the rash of precipitous closures of several for-profit colleges in the mid-2010s, the Obama Administration responded by publishing updated regulations in 2016. One of the first actions of the Trump Administration was to delay the implementation of the Obama Administration’s regulations, a move that was later ruled by a federal court to violate federal administrative procedure rules. The final regulations published by the Trump Administration last September update the Obama Administration’s 2016 regulations.
Due to the long legal, political, and policy history of the borrower defenses to repayment regulations, there is likely to be three different standards in place for aggrieved borrowers based on when their loans were disbursed. The three thresholds are for loans disbursed:
President Trump is expected to veto the legislation, and Congress is unlikely to have enough votes to override the presidential action. Should Congress fail to override President Trump’s likely veto, the Trump Administration’s regulations will go into effect on July 1, 2020.
While passage of the legislation was an expected development in the House, the defection of so many Republicans in the Senate was unexpected.
The Trump Administration’s regulations have been controversial on Capitol Hill for the relatively limited relief offered to defrauded students, especially when compared to the much more student-friendly regulations published by the Obama Administration. Secretary DeVos was grilled by Congress at a hearing last December regarding the scope and implementation of the Department’s borrower defenses plan.
The borrower defenses to repayment process originated during the Clinton Administration in the mid-1990s. Following the rash of precipitous closures of several for-profit colleges in the mid-2010s, the Obama Administration responded by publishing updated regulations in 2016. One of the first actions of the Trump Administration was to delay the implementation of the Obama Administration’s regulations, a move that was later ruled by a federal court to violate federal administrative procedure rules. The final regulations published by the Trump Administration last September update the Obama Administration’s 2016 regulations.
Due to the long legal, political, and policy history of the borrower defenses to repayment regulations, there is likely to be three different standards in place for aggrieved borrowers based on when their loans were disbursed. The three thresholds are for loans disbursed:
- Prior to July 1, 2017 (Clinton Administration regulations);
- Between July 1, 2017 and before July 1, 2020 (Obama Administration regulations); and
- After July 1, 2020 (Trump Administration regulations).