11.14.17

Durbin, Warren Release Report Highlighting Secretary DeVos' Failure To Cancel Student Loans Of Nearly 90,000 Defrauded Students

Duckworth Joins Senators Call For Full, Immediate Relief

WASHINGTON – U.S. Senators Dick Durbin (D-IL) and Elizabeth Warren (D-MA) today released a report – “Insult to Injury: How the DeVos Department of Education is Failing Defrauded Students” – detailing how the Department of Education (ED) and Secretary Betsy DeVos have failed tens of thousands of Americans by refusing to cancel the loans of students who were defrauded by predatory colleges.  Senator Tammy Duckworth (D-IL) joined Sens. Durbin and Warren, along with 13 of their Senate colleagues, in sending the report directly to Secretary DeVos, urging her to read the report's stories of defrauded borrowers, and to respond to the report's recommendations. 

“The widespread fraud committed by Corinthian Colleges and ITT Tech wreaked havoc on the lives of tens of thousands of students nationwide, leaving them with high levels of debt, poor job prospects, useless degrees and credentials, and in many cases no degree at all,” said Durbin.  “We can't leave these students holding the bag.  The Department should immediately provide the full relief to which these and other defrauded borrowers are entitled under the law.” 

Following the collapse of for-profit giants Corinthian Colleges and ITT Technical Institute, thousands of students were left with a useless education and massive amounts of debt, leading many to apply to the federal government for relief from their student loans.  Under the Borrower Defense to Repayment provision of the Higher Education Act, ED has the legal authority to provide defrauded students with complete, immediate, and automatic relief from their federal student loans – but the Trump Administration and Secretary Betsy DeVos have refused to discharge a single loan, leaving nearly 90,000 students waiting for relief.

The report by Senators Durbin and Warren found, based on data provided by ED, that since Secretary DeVos took office, not a single borrower defense claim has been approved.  Additionally, the total number of pending borrower defense claims have increased under the Trump Administration, growing from 65,169 in July of 2017 to around 87,000 in October.  The report further found that some borrowers have been waiting more than two years for their claims to be processed, and detailed the experiences of eight students from across the country. 

  • Ami Schneider, Illinois: Ami, a first-generation college student, enrolled at The Illinois Institute of Art to become a photographer, but was quickly disappointed by the quality of the education she received, and the lack of opportunities available after she graduated. After taking out $100,000 in student loans and being unable to find gainful employment, Ami was forced to file for bankruptcy. She has yet to receive a substantive response from ED on her borrower defense claim. "The school defrauded me plain and simple, and I have the evidence," said Ami.

In the report, Senators Durbin and Warren offered nine specific recommendations for ED to bring relief to the thousands of students applying for borrower defense: 

  1. Immediately provide full discharges to the remaining students with borrower defense claims approved prior to January 20, 2017 who have yet to receive relief;
  2. Immediately begin processing borrower defense claims in order to reduce the current backlog of 87,000 claims;
  3. Commit to providing full relief for future claims, as opposed to partial relief reportedly under consideration by some ED officials;
  4. Provide full, automatic discharges to Corinthian students covered by previous ED findings that entitle covered students to expedited borrower defense discharges;
  5. Work with state Attorneys General and federal agencies to issue similar findings of wrong-doing against the now-defunct ITT Tech, and identify affected students in order to provide full, automatic discharges;
  6. Extend forbearance for all borrowers with pending claims;
  7. Use evidence and information submitted by state Attorneys General to provide full, group discharges to affected students;
  8. Implement the Senate Labor, HHS, Education Appropriates Subcommittee directive to provide quarterly public reports on the receipt and processing of borrower defense claims;
  9. Immediately halt collections activity on defaulted borrowers with pending borrower defense claims and all defaulted Corinthian borrowers.

Senators Sherrod Brown (D-OH), Bernie Sanders (I-VT), Kamala Harris (D-CA), Tom Carper (D-DE), Kirsten Gillibrand (D-NY), Tammy Baldwin (D-WI), Jack Reed (D-RI), Ben Cardin (D-MD), Sheldon Whitehouse (D-RI), Dianne Feinstein (D-CA), Al Franken (D-MN), Edward J. Markey (D-MA), and Richard Blumenthal (D-CT) also joined Senators Durbin, Duckworth, and Warren in calling on Secretary DeVos to review and respond to the report's recommendations.