U.S. Senator Tina Smith Pushes Education Secretary DeVos to End Delays in Loan Forgiveness for Students who Attended Now-Defunct For-Profit Colleges

 WASHINGTON, D.C. [06/19/19]—U.S. Senator Tina Smith (D-Minn.) is calling on U.S. Education Secretary Betsy DeVos to quickly process the claims of thousands of defrauded students in Minnesota and across the country seeking to get their federal student loans discharged.  Thousands of pending discharge applications from students who attended now-defunct colleges – including more than 2,700 from Minnesota – have languished at the U.S. Department of Education for an average of 882 days.  
 
Sen. Smith — along with Sens. Dick Durbin (D-IL), Patty Murray (D-WA), and 19 of their Democratic colleagues — wrote Wednesday to U.S. Education Secretary Betsy DeVos to press her to act on the more than 158,000 pending applications filed by students seeking to have their student loans discharged.  Attorneys General from Minnesota and 20 other states have filed group discharge applications on behalf of the students.     
 
The applications cover students who attended Globe University and Minnesota School of Business, American Career Institute, Anthem University, Corinthian Colleges, Inc., Kaplan University, Lincoln Technical Institute, Westwood College, Illinois Institute of Art, and Art Institute of Colorado.
 
“The applications rely on findings made by the Department itself or supporting evidence, collected and provided by State attorneys general as part of the application, establishing the group’s eligibility for federal loan discharge under the borrower defense provision of the Higher Education Act…making these loans particularly easy to discharge,” the Senators wrote to Secretary DeVos. 
 
“It is time for your cruel delays to end and for you to provide federal student loan discharges to which defrauded borrowers are entitled under the law; the courts have ordered it, students are begging for it, Congress expects it, and justice demands it,” the Senators concluded.
 
Since taking office, the Trump Administration and Secretary DeVos have attempted to shield for-profit colleges from accountability. The Administration illegally delayed the Obama-era Borrower Defense rule, which provides a streamlined process for defrauded borrowers to receive borrower defense discharges and allows students to hold school directly accountable in court for misconduct by prohibiting the use of mandatory pre-dispute arbitration. The Department is now in the process of rewriting the regulation in an effort to water down its protections for students and taxpayers.
 
In addition to Sens. Smith, Durbin, and Murray, the letter was signed by Sens. Amy Klobuchar (D-MN), Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Ed Markey (D-Mass.), Tammy Duckworth (D-Ill.), Bob Casey (D-Pa.), Chris Murphy (D-Conn.), Kamala Harris (D-Calif.), Ron Wyden (D-Ore.), Dianne Feinstein (D-Calif.), Chris Van Hollen (D-Md.), Tammy Baldwin (D-Wis.), Tim Kaine (D-Va.), Mazie Hirono (D-Hawaii), Michael Bennet (D-Colo.), Ben Cardin (D-MD), Brian Schatz (D-HI), and Kirsten Gillibrand (D-NY). 
 
You can read full text of the letter here and below:  
 
 
June 18, 2019
 
Dear Secretary DeVos:
 
We write today to seek the status of each borrower defense group discharge application submitted by State attorneys general and urge you to provide full borrower defense discharges to qualified borrowers covered by these group applications.
 
According to data recently provided by the Department of Education (Department), attorneys general of 20 states have submitted group discharge applications on behalf of defrauded borrowers in their states.   These applications cover students who attended American Career Institute, Anthem University, Corinthian Colleges, Inc., Globe University and Minnesota School of Business, Kaplan University, Lincoln Technical Institute, and Westwood College.   Earlier this month, Attorney General Kwame Raoul of Illinois and Attorney General Phil Weiser of Colorado submitted group discharge applications on behalf of Illinois Institute of Art and Art Institute of Colorado students who were misled about their institutions’ accreditation status.   
 
The applications rely on findings made by the Department itself or supporting evidence, collected and provided by State attorneys general as part of the application, establishing the group’s eligibility for federal loan discharge under the borrower defense provision of the Higher Education Act.  In addition, State attorneys general have often already done the exacting work of assembling enrollment and contact information of borrowers within the groups—streamlining administrative processes for the Department and making these loans particularly easy to discharge.
 
Despite this, you have inexcusably failed to review and respond to these group applications.   In a recent decision in Williams v. DeVos, a federal district court found that you must review group discharge applications submitted by State attorneys general and that you must cease all involuntary collection activities against borrowers covered by State attorney general group discharge applications.   Please provide an update on the status of each of the group discharge applications submitted by State attorneys general.
 
In addition to your failure to respond to group discharge applications from State attorneys general, you are forcing at least 158,110 borrowers with pending borrower defense claims to languish without decision.   These borrowers have been waiting an average of 882 days each.   In fact, it has been nearly one year since the Department publicly reported any borrower defense approvals. 
 
It is time for your cruel delays to end and for you to provide federal student loan discharges to which defrauded borrowers are entitled under the law; the courts have ordered it, students are begging for it, Congress expects it, and justice demands it.
 
Sincerely,