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Blumenthal, Warren and Durbin Call for Full, Immediate Relief, Offer Recommendations After Devos’s Failure to Discharge Student Loans of Nearly 90,000 Defrauded Students

[WASHINGTON, DC] – U.S. Senator Richard Blumenthal (D-CT) wrote in support of a report released by Senators Elizabeth Warren (D-MA) and Dick Durbin (D-IL) detailing how the Department of Education (ED) and Secretary Betsy DeVos have failed tens of thousands of Americans by refusing to fully discharge  the loans of students who were defrauded by predatory colleges. Blumenthal joined 14 Senate colleagues, led by Warren and Durbin, 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. 

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. 

“Predatory for-profit colleges like Corinthian Colleges and ITT Technical Institute maliciously lined their pockets while leaving students with mountains of debt and, often, without a useable diploma. The Department of Education’s failure to act on behalf of these students—who deserve full financial relief-- is unconscionable. This crisis, as outlined in today’s report, should be a call to action for stronger student protections against these predatory for-profit schools,” said Blumenthal.

The report led by Warren and Durbin 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. 

The report 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 forebearance 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. 

 U.S. 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), Tammy Duckworth (D-IL), Al Franken (D-MN), and Edward J. Markey (D-MA) also joined Senators Blumenthal, Warren and Durbin in calling on Secretary DeVos to review and respond to the report’s recommendations.