Axne Votes to Provide Relief to Defrauded Students

January 16, 2020
Press Release

Washington, D.C. — Today, Rep. Cindy Axne (IA-03) voted to pass legislation to protect students who have been defrauded by higher education facilities and predatory for-profit colleges. The House passed House Joint Resolution 76 with bipartisan support, and Rep. Axne cosponsored the legislation with more than 160 of her colleagues.

“If someone sold you a car that was supposedly top of the line, and after you paid for it you couldn’t leave the parking lot because it wouldn’t start, we have laws to protect you,” said Rep. Axne. “Our students deserve the same legal protection for what may be one of the largest investments in their lifetime.”

The resolution passed today would block a change to the Department of Education (DOE) borrower defense rule proposed by Education Secretary Betsy DeVos. The proposed change would leave more defrauded students with crushing debt and allow for-profit colleges to shift the costs of relief to taxpayers.

“In Iowa, we want fairness. When a school promises they can help you get a job in health care or information technology, charges you a couple hundred thousand dollars for it, and then fails to give you the education you need to get an interview, much less a job — that’s fraud.” said Rep. Axne. “American students and taxpayers should not be the ones paying the bill for these fraudulent businesses.”

The borrower defense rule, originally written to help defrauded students get relief, was changed to limit how much can be received by borrowers, make it far more difficult for students to receive relief, and shift the costs of helping defrauded students from predatory schools to U.S. taxpayers. While the original rule made sure that 97% of all students who qualify for borrow defense relief are approved, Secretary DeVos’ rule change will leave far more students unable to qualify for debt relief.

The original borrower defense rule was written after the collapse of Corinthian Colleges and ITT Technical Institute in 2016, leaving students with hundreds of thousands in student loan debt and degrees that were not accepted by major employers. ITT Tech had been charging its students some of the highest tuition fees, ranging between $45,000 to $85,000, while providing classes and certifications that did not prepare or qualify students in their career fields.

“I’ve heard from Iowans in this terrible situation — they are often middle-aged, mid-career, and wanting to increase their education to get a better job with better benefits,” said Rep. Axne. “They tried to get a leg up, but instead they were let down. They were lied to, and are left with a stack of loans and a nearly worthless degree.”

Prior to the House passing House Joint Resolution 76, Rep. Axne joined five colleagues in introducing the Relief for Defrauded Students Act, a bill to ensure defrauded students and families get relief when for-profit colleges misrepresent their degree programs or close before students graduate, do not offer job opportunities, and stick higher-education seekers with excessively high student loan debt.

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