President Donald Trump late on Friday vetoed a resolution that would have made it easier for students defrauded by for-profit schools to get their student loans erased.
Veterans and low-income students, especially Black students and others of color, will be most affected by this veto because they are the main target of many for-profit schools.
Without Trump’s veto, the bipartisan congressional resolution — passed with the support of 10 Senate Republicans — would have overturned a Department of Education rule that makes it harder for student borrowers to prove the colleges they enrolled in defrauded them. Trump’s veto means Secretary of Education Betsy Devos’s rule, released last year, will go into effect July 1. The administration says Devos’ rule will save the federal government $11 billion over the next decade.
Trump justified the veto by calling the measure “a misguided resolution that would increase costs for American students and undermine their ability to make choices about their education in order to best meet their needs.”
But critics contend Devos’ rule will allow predatory for-profit colleges, which were earlier held accountable, to get away scot-free. After the for-profit Corinthian Colleges was sued for predatory lending, it shut down in 2015 and many of its students had their loans forgiven. A year later, ITT Technical Institutes shut shop after “allegations of fraud, deceptive marketing and steering students into predatory loans.”
Students at these institutions got some relief from a 1992 borrower defense policy, but that policy wasn’t detailed enough. In 2016, spurred by the Corinthian and ITT Technical debacles, President Barack Obama’s Department of Education created the Borrower Defense to Repayment Rule, which laid out clearer guidelines on how students could seek forgiveness. The rule went into effect on October 17, 2018. But since 2017, Devos has sought to roll this back. She claimed Obama’s rule made it too easy for students to seek debt forgiveness.
Meanwhile, for-profit schools have continued to grow. More than 1 million students were enrolled at degree-granting, for-profit schools in 2017, according to data from the Department of Education, reported USA Today last year. Trump’s veto affects “more than 200,000 students who currently have borrower defense to repayment claims pending with the Department of Education,” according to Tamara Hiler, director of education at think tank Third Way.
