07.24.18

Durbin Releases Shocking New Data On Department Of Education's Borrower Defense Application Backlog

Numbers provide further evidence of Secretary DeVos, Trump Administration blatant failure to provide debt relief to defrauded student borrowers

WASHINGTON – U.S. Senate Democratic Whip Dick Durbin (D-IL) today called out the Trump Administration and Education Secretary Betsy DeVos for findings revealed in a response to Durbin’s Questions for the Record (QFR) from June 12, 2018, that show the Department’s blatant actions to avoid providing student loan relief to borrowers who were defrauded by predatory for-profit colleges.  Under the Borrower Defense to Repayment provision of the Higher Education Act, the Department of Education has the legal authority to provide cheated and defrauded students with complete, immediate, and automatic relief from their federal student loans. 

“The borrower defense numbers revealed today don’t lie.  Fraud, deception, and predatory practices were and continue to be pervasive across the for-profit college industry,” said Durbin.  “On top of this, the Trump Administration and Secretary DeVos continue to drag their feet in providing the relief defrauded borrowers are entitled to under the law and continue to dismantle protections like the Obama-era Borrower Defense rule and Enforcement Unit designed to prevent future abuse.  First, the students were defrauded by for-profit schools, including Chicago’s DeVry, and now Secretary DeVos gives them the run-around.  The Department should immediately provide the full relief to which these and other defrauded borrowers are entitled under the law.”

Main takeaways from the Department of Education’s response to Durbin’s QFRs include:

  • As of May 1, 2018, there are 99,335 “borrower defense” claims by students pending;
  • Top five schools with the most total pending claims are: Corinthian 45,675; ITT Tech 13,175; DeVry 10,275; Education Management Corporation (EDMC) 4,435; University of Phoenix 3,965;
  • For the first time, pending “borrower defense” claims from schools other than Corinthian outnumber pending Corinthian claims, making clear that fraudulent and predatory practices are a problem beyond Corinthian;
  • Total interest for borrowers with pending claims equals $368.8 million;
  • Since January 20, 2017, the Department of Education has received 63,525 “borrower defense” claims, but only approved 12,395; and
  • At least 65,000 former Corinthian students who could be eligible for “borrower defense” are currently subject to wage garnishment and Treasury Offset. 

In May 2017, Durbin, along with Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Sherrod Brown (D-OH), and Elizabeth Warren (D-MA) demanded answers regarding the delay of payment on tens of thousands of student loan discharges and refunds approved under the “borrower defense” authority.  On July 7, 2017, the Department provided a response, which showed growing numbers of borrower defense claims being filed and that it had not approved a single new claim since the Trump Administration took office. 

In November 2017, Durbin and Senator Elizabeth Warren (D-MA) released a report – “Insult to Injury: How the DeVos Department of Education is Failing Defrauded Students” – detailing how the Department of Education and Secretary DeVos have failed tens of thousands of Americans by refusing to cancel the loans of students who were defrauded by predatory colleges.

The Department of Education’s response to Durbin’s QFRs is available here.  The Department of Education’s attachment is available here. 

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