Overturning Betsy DeVos’ Borrower Defense Rule is a Political No-Brainer for President Trump

By: Tamara Hiler

There are a lot of things going on in the world right now to incite fear, worry, and pessimism.

Yet, in the midst of the ongoing coronavirus crisis and a partisan divide that often feels insurmountable, something remarkably bipartisan happened right before the COVID-19 pandemic began. Senators from both sides of the aisle joined their counterparts in the House of Representatives to pass a joint resolution blocking a recent rewrite of the Borrower Defense to Repayment (BDR) regulation by Education Secretary Betsy DeVos. This rule, which will never take effect unless President Trump vetoes the resolution Congress passed, would have made it harder for borrowers to discharge their federal student loans if they were the victims of fraud by a predatory institution.

Set to go into effect July 1st, DeVos’s rewrite of the rule would put in place a number of hurdles that would make it nearly impossible for defrauded students to seek the relief to which they are entitled to under federal law. For one, students would have to prove not only that they relied on substantial misrepresentation by their institution in deciding to enroll, but also that the college knew it was providing false information and acted with reckless disregard toward accurate information. In addition, borrowers would only have a three-year time limit from the time they left a school to file a claim, even if new evidence of a college’s misconduct emerged later. And the Department would no longer be able to process borrowers’ claims as a group, including in cases of widespread abuse, instead requiring all students to individually prove their claims — even if a whole class of students was defrauded.

Because of these extreme provisions, Secretary DeVos’ own estimates show that only 3% of all student loans impacted by colleges’ illegal activity would be cancelled under the new rule — leaving the vast majority of defrauded students on the hook for unlawful actions taken by the colleges they paid to educate them.

But in early March, Congress rebuked Secretary DeVos and voted in a remarkably bipartisan fashion to overturn this rule. And now, President Trump has an unprecedented opportunity to come in big and show students harmed by predatory colleges that have broken the law that he has their backs. By doing so, he would also fulfill a campaign promise to enact a proactive student debt agenda and show predatory colleges that it’s them, and not taxpayers, who should be left holding the bag when misconduct occurs.

And let’s be clear, signing this resolution into law isn’t just good policy and the right thing to do as our country faces its largest economic test since the Great Depression, but it’s good politics for the President, too. National polling shows that there is overwhelming bipartisan support (including from 71% of Republicans and 87% of Democrats) for canceling the federal student loans of borrowers who have been defrauded by their schools. A veto of this resolution would be a huge slap in the face — not only to the more than 150,000 borrowers with pending claims in every state across the US, but also to the more than 30 veterans’ groups who recently implored him to help the veterans and military-connected students who are disproportionately targeted by schools that have broken the law.

With the 2020 election right around the corner, President Trump has every reason to want to shed his past association with the now-defunct Trump University and show that he’s taken tangible steps to protect students from malpractice within our higher education system. I’m sure the President doesn’t want the first domestic policy veto of his term to be depriving defrauded students of what they legally deserve.

Secretary DeVos had one talking point for supporting this rule: that it would save taxpayers money. But the Senate — including 10 Republicans — knew that it would do so only by denying students the relief they desperately need, and to which they are legally entitled under statute. That’s indefensible — especially as students legally entitled to this relief need it more than ever as they further weather the economic storm created by COVID-19. For President Trump, signing the resolution is an easy win. He should join with Congress to tell Secretary DeVos that it’s time to go back to the drawing board and draft a rule that will be fair to both defrauded borrowers and taxpayers.

Tamara Hiler is the Director of Education at Third Way, a think tank in Washington, DC.