Betsy DeVos Proposes Legislation to Restrain Loan Relief Awards

Secretary of Education Betsy DeVos recently proposed a measure which would make the process of loan application even more difficult for students.

DeVos’ legislation, if passed, would replace a set of rules which were written by the Obama administration and were never implemented. DeVos’ proposal has garnered heavy criticism from student advocacy groups.

Under this proposed legislation, students would only be eligible for loan relief if they proved that their schools purposefully misled them into applying for loans or enrolling in their institutions. Previous loan rules were more comprehensive and would potentially support students in other situations.

The Education Department has supported DeVos’ measure, stating that students should do more research before applying to a school and therefore avoid being scammed. The Department stated:

Postsecondary students are adults who can be reasonably expected to make informed decisions if they have access to relevant and reliable data about program outcomes.”

DeVos’ proposal could save the federal government $13 billion over the next decade, mostly saving money from fewer loan relief awards. The Education Department has apparently received over 100,000 requests for loan relief since 2015, most of which are still being analyzed. The Department has argued that schools will now be able to “defend themselves” in face of fraud claims by forcing students to sign arbitration agreements, which would prevent schools from being sued.

Director of the Project on Predatory Student Lending Toby Merrill has been one of the most open opponents to the proposed legislation, stating:

It encourages abusive and predatory institutions to continue to rip off students with impunity, while slamming the door on the debt relief that Congress has instructed the department to provide to cheated students.”

Many have deemed the legislation to be un-thoughtful and one of DeVos’ worst actions since she was appointed to her position. Many have also stated that this legislation is proof that DeVos is not qualified to be Education Secretary.

On the other hand, many for-profit universities have stated that the proposition is fair and will limit requests.

The restrictions will be applicable to loans taken from July 1st, 2019 onward.


Featured Image via Flickr/Gage Skidmore