House Democrats did not overturn President Donald Trump’s decision on Friday veto a move that would have reversed the Department of Education’s strict policy on canceling loans for students misled by for-profit colleges.
The House voted 238-173 in favor of the waiver measure, failing the two-thirds majority needed to send it to the Senate.
This is a victory for Education Secretary Betsy DeVos, whose student loan cancellation policy was threatened after Congress voted to cancel it in March. It now remains in place and will come into effect on July 1.
A statement from the Education Ministry said it was happy to implement a rule “that protects students from fraud, treats higher education institutions fairly and protects taxpayers.”
the measured Congress approved in March would have reinstated a 2016 rule created by the Obama administration. It was approved using the Congressional Review Act, which allows Congress to overturn federal rules with a simple majority of both houses and the approval of the president.
While the initial measure enjoyed bipartisan support, only six Republicans voted to quash the veto, while 172 opposed it.
In calling for the waiver, Democrats said DeVos’ rule made it nearly impossible to cancel loans for cheated students. They accused her of stacking the rules in favor of the for-profit college industry, which has found an ally in the Trump administration.
But Republicans have said DeVos’ rule is an improvement on the policy of the Obama era, which they said granted loan cancellations too freely.
“Mass loan cancellation has long been a Democratic goal, and the Obama rule has been a giant leap toward that goal. One who also ignored the high cost to taxpayers, ”said Rep. Virginia Foxx, RN.C., the Republican ranked on the House education committee.
The dispute stems from a policy known as the Borrower’s Repayment Defense, which allows borrowers to write off their federal student loans if their colleges have made false statements to get them to enroll.
The rule was created in the 1990s, but was extended under President Barack Obama after the collapse of the for-profit college chain Corinthian Colleges. The chain closed in 2015 after authorities discovered it was using deceptive ads to recruit students and lied about the success of its graduates.
Students could get loan forgiveness under the Obama-era rule if there was evidence of material misrepresentation or breach of contract by the college. In the event of widespread fraud, entire groups of students could have their loans discharged in a single claim.
But DeVos suspended the policy before it took effect, saying it had become too easy to get loan forgiveness. Last year DeVos replaced it with a new policy that she says protects taxpayers and colleges from frivolous claims.
His rule sets a higher bar for loan relief, requiring borrowers to prove that their schools knowingly misled them and caused personal financial harm. It also sets a time limit for applications, giving students up to three years after graduation or withdrawal.
Other changes include the elimination of group claims and a provision that automatically cancels loans for students who attended schools that closed before they could graduate.
Her policy has been backed by Republicans and the for-profit college industry, which says it has been unfairly targeted by the Obama administration. Democrats and consumer advocates, however, say the rule removes protections for defrauded students.
The Institute for College Access and Success said on Friday the rule would leave many defrauded students forced to repay their loans.
“The rule creates roadblocks for defrauded students amid an economic and public health crisis, while imposing virtually no consequences for deceptive colleges,” said James Kvaal, president of the association.
DeVos faced sharp criticism Democrats on his handling of politics and a backlog of loan cancellation requests. In April, DeVos said it would process more than 170,000 complaints under a regulation in a lawsuit alleging that she illegally stopped the process while rewriting the rule.
As of April 30, the agency said it had 130,000 pending requests out of a total of 318,000 requests received.
DeVos separately amended the policy to provide only partial loan relief to many students. Its update provides for full releases only if students have taken programs that produce graduates with average incomes much lower than graduates of similar programs. Other students see part of their loans canceled. The rule of the Obama era only provided for a total forgiveness of the loan.
Consumer groups filed a lawsuit challenging DeVos’ partial relief rule in June.
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