Donna Shalala: “The 2016 borrower defense rule created a process for student loan borrowers to demonstrate that their loans did not need…”

“The 2016 borrower defense rule created a process for student loan borrowers to demonstrate that their loans did not need to be repaid due to their school's misleading, fraudulent, or otherwise illegal conduct. Many of those that closed their doors left thousands of students with no credible recourse. Instead of working to protect students and taxpayers, however, the Education Secretary and the Department have repeatedly sided with these bad actors. By rewriting the borrower defense rule to favor those institutions, the Secretary has made it harder for borrowers to get relief and shifted the cost of providing debt relief from the schools to the taxpayer. Several independent reports have concluded that this rewrite is fundamentally rigged against defrauded borrowers, depriving them of the opportunity for assistance promised them under the Higher Education Act. According to an analysis based on the Department's data, the changes to the financial triggers in the 2019 rule will result in institutions repaying only 1 percent of the eligible loan debt. Mr. Speaker, I have led three institutions of higher education. The Secretary has created a bureaucratic nightmare. Even I, after reading the regulation carefully, could not figure out all the information that was necessary to apply for relief. The Federal Government should be putting students and taxpayers first rather than helping financially irresponsible schools stay afloat. Mr.…”