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House votes to overturn Trump rule that makes loan forgiveness harder; Senate fight looms

House Democrats approved a resolution to overturn a Trump administration policy that imposes tougher restrictions on students seeking loan forgiveness. (Tom Brenner/Reuters)

The House voted Thursday to overturn a Trump administration policy that makes it more difficult for students who say they were defrauded by colleges to have their federal education loans canceled, setting the stage for a fight in the Senate.

The 231-to-180 vote fell largely along party lines, with six Republicans endorsing a resolution to scrap the administration’s overhaul of a 1995 law known as “borrower defense to repayment.” The law gives the Education Department authority to cancel the federal debt of students whose colleges misled them about graduation or job placement rates to get them to enroll.

Trump administration sets higher hurdles for defrauded students to erase debt

Education Secretary Betsy DeVos spent two years trying to delay and then scuttle an Obama-era update of the law that lowered hurdles for students and shifted more of the cost of forgiveness onto schools. The Trump administration finalized its rewrite of the Obama rule in September, limiting the time borrowers have to apply for relief and requiring them to prove financial harm. The rule will take effect July 1.

Democrats have signaled for months their intentions to sideline the policy by using the Congressional Review Act, which lets lawmakers overturn recent regulatory actions of federal agencies with a simple majority vote in both chambers. Although the statute allows Democrats to force a vote on the Senate floor, they face a formidable challenge in getting any Republicans on board with the measure.

“I’m going to be reaching out to my Republican colleagues to join me. I want all of those who wave the flag … to come and stand up for veterans when they get a chance on the floor,” Senate Minority Whip Richard J. Durbin (D-Ill.) said during a news conference on the measure Thursday.

Even if Democrats can persuade four Republicans in the Senate, they must get President Trump to sign off on the measure. The White House threatened this week to veto the resolution if it passed, arguing it would undermine the administration’s efforts to protect students and taxpayers.

In a policy statement Monday, the White House Office of Management and Budget defended the rule and said that overturning it “would restore the partisan regulatory regime of the previous administration, which sacrificed the interests of taxpayers, students and schools in pursuit of narrow, ideological objectives.”

Despite clear opposition from the White House, Durbin plans to call up the measure on the Senate floor in coming weeks. Democratic congressional staffers say the vote is an opportunity to learn where lawmakers stand on for-profit college accountability and helping defrauded borrowers.

Durbin and Rep. Susie Lee (D-Nev.) have led the congressional campaign to overturn the Trump policy and introduced resolutions in their chambers days after the administration finalized the rule. The lawmakers say the Trump rule guts essential protections for borrowers and taxpayers while giving predatory schools a pass.

“We’re not going to sit on the sidelines while these institutions scam our families, our friends and our veterans while they’re trying to get an education,” Lee said during the news conference Thursday. “The burden of proof these students have to provide is unrealistic.”

The Trump administration has argued that the reforms will save taxpayers more than $11 billion over the next decade by reducing loan forgiveness.

The policy handed a victory to for-profit colleges that derided the Obama rules as harmful to their programs. Most borrowers who seek relief from debt attended for-profit schools. Some Republicans accused the Obama administration of relaxing the standards for debt relief as a surreptitious way of going after the sector and encouraging students to apply for help even if they were ineligible.

“This was nothing more than a political move by the left to provide a backdoor scheme to hand out free education,” Rep. Virginia Foxx (R-N.C.), the top Republican on the House Education Committee, said Thursday on the House floor. “So it is not surprising that claim filings for loan forgiveness went from 59 submitted in the first 20 years to roughly 300,000 claims submitted in the last five years.”

The Education Department has been inundated with relief claims following the closure of Corinthian Colleges and ITT Technical Institute, for-profit chains felled by charges of fraud and predatory lending. Claims continue to mount as other for-profit colleges, including Argosy University and the Art Institutes, have folded.

Argosy students turn to the courts for answers about their missing financial aid

Kendrick Harrison, an Iraq War veteran, was pursuing a business degree at Argosy in Las Vegas as the school began unraveling last year. He was among the students whose $16 million in federal financial aid was used by Argosy to cover payroll and other expenses.

Those illegal actions led the Education Department to cut off the school’s access to federal loans and grants, and ultimately fostered its demise. Argosy’s deeds also left Harrison without money to cover his bills and resulted in his family being evicted and car being repossessed.

“I spent three years fighting tooth and nail for a degree that got pulled from under me three months before graduation,” Harrison said at the news conference Thursday. “Students are being defrauded. Everyone is not lucky enough to have lawyers. No one should have to go through this.”