06.18.19

Durbin, Murray, Dem Senators Seek Status Of Group Discharge Applications Submitted By State AG's

WASHINGTON – U.S. Senators Dick Durbin (D-IL) and Patty Murray (D-WA), along with 20 of their Democratic colleagues, today requested the U.S. Department of Education provide an update on group discharge applications filed by 21 State attorneys general on behalf of thousands of defrauded students who are eligible for federal loan discharge under the borrower defense provision of the Higher Education Act.  The 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, Westwood College, Illinois Institute of Art, and Art Institute of Colorado.  The list of applications was disclosed by the Department in response to a Questions for the Record submitted by Durbin following a March 28, 2019, Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing on the Fiscal Year 2020 Budget Request from the U.S. Department of Education. 

“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 members wrote to Secretary of Education Betsy DeVos. 

Today’s letter was signed by U.S. Senators Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Sherrod Brown (D-OH), Ed Markey (D-MA), Tammy Duckworth (D-IL), Bob Casey (D-PA), Chris Murphy (D-CT), Kamala Harris (D-CA), Ron Wyden (D-OR), Dianne Feinstein (D-CA), Chris Van Hollen (D-MD), Tammy Baldwin (D-WI), Tim Kaine (D-VA), Tina Smith (D-MN), Mazie Hirono (D-HI), Michael Bennet (D-CO), Amy Klobuchar (D-MN), Ben Cardin (D-MD), Brian Schatz (D-HI), and Kirsten Gillibrand (D-NY).

Recently, in Williams v. DeVos, a federal district court found that the Department must review group discharge applications submitted by State attorneys general and that it must cease all involuntary collection activities against borrowers covered by State attorney general group discharge applications.

In addition to failing to act on State attorney general group discharge applications, the Department has failed to process tens of thousands of individual applications submitted by borrowers.  According to the most recently available data from the Department, at least 158,110 borrower defense applications are pending—with an average wait time of 882 days.  The Department has not approved any borrower defense discharges for more than a year.

“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.

Full text of today’s letter is available 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,

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