Our Statement on DeVos’ Newly Proposed Borrower Defense Rules
The Department of Education’s newly proposed borrower defense rule is an assault on the most vulnerable people in our society and a handout for actors who want to prey on them. Higher education is not meant to be a debt trap; it should be enriching and provide social mobility for those who seek to achieve the American Dream. The DeVos’ administration is actively choosing to turn a blind eye to these so-called higher education institutions which aggressively target low-income communities, communities of color, service members and veterans. These schools do not have the best interests of students in mind, and they provide low-quality education and have abysmal outcomes.
The federal government has failed to protect defrauded college students, and now DeVos is stripping states’ right to serve as the watchdog on these predatory lending practices. In addition, the newly proposed rules are undoing the streamlined process established in 2016 for loan forgiveness for those who were defrauded by their schools and ending the automatic loan discharges for students stranded by school closures. In fact, borrowers will now find it almost impossible to have their loans discharged.
The new rules are absurd — borrowers will be asked to first default before they can apply for relief. The burden of proof will be on the students who will have to provide evidence that a school acted intentionally in deceiving them and demonstrate that there was “a reckless disregard for the truth.” The assault on our students doesn’t end there, DeVos’ new rules are reinstating schools’ right to include arbitration clauses in their enrollment contracts, preventing students from seeking relief in the courts.
At the Hildreth Institute, we believe that the student loan system created perverse incentives enabling many actors operating in the higher education space to prey on students. Without the proper accreditation processes, accountability measures, and oversight, these predatory actors will continue to base their business models on the availability of these loans with little commitment to providing quality education.
We must protect students’ interests at all costs. While we are actively advocating for solutions that replace loans with grants, we must also advocate to protect those who have been unjustly impacted by predatory practices. We have 30 days to raise our voices and show our discontent over the proposed rules, this is the time to be loud and show that WE the people matter more than the lobbyists.
See our coalition partners’ Statement on this issue HERE