Student Debt Battle Pits DeVos With Key House Democrat The Education Department narrowly avoids a subpoena in a fight with House Democrats over forgiving the loans of defrauded student borrowers.
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Betsy DeVos And The High-Stakes Standoff Over Student Loan Forgiveness

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Betsy DeVos And The High-Stakes Standoff Over Student Loan Forgiveness

Betsy DeVos And The High-Stakes Standoff Over Student Loan Forgiveness

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DAVID GREENE, HOST:

U.S. Education Secretary Betsy DeVos has narrowly avoided a subpoena. Her department last night agreed to hand over a trove of documents to the Democratic chair of the House Education Committee. Representative Bobby Scott had already signed the subpoena and was within hours of legally compelling DeVos to hand over those records. And let's learn exactly what this is all about with NPR's Cory Turner, who is here.

Hey, Cory.

CORY TURNER, BYLINE: Hi, David.

GREENE: OK. So before we get to the subpoena of the documents, what is this larger fight all about here?

TURNER: Yeah. It's all about a federal rule from 1995. It's called borrower defense. And it basically says if a student is defrauded by a college, then they're entitled to have their federal student loans forgiven. Now, the rule, for the longest time, was hardly used. But that all changed just a couple of years ago during the Obama administration.

GREENE: OK. So used in the Obama administration - why has it suddenly become a thing now in the Trump administration?

TURNER: Well, it's because a couple of years ago, several high-profile, for-profit chains - I'm sure you remember - were investigated for lying to students about all sorts of things, including job prospects after graduation and future earnings. One big one, Corinthian Colleges, declared bankruptcy. I spoke with one borrower - her name is Alicia Davis - who, in the mid-2000s, enrolled at Florida Metropolitan University, which was part of Corinthian. Let's hear a bit from her.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

ALICIA DAVIS: They told me that you were going to get a job with this specific salary during this time, you know. And they provided me an image of how their college is that didn't exist.

TURNER: So Davis only attended for about a year. She refuses to repay those loans that she took out, calling the whole thing a scam. She filed a borrower defense claim in 2015...

GREENE: Thinking that this is exactly the reason this law was in place.

TURNER: Exactly. But Education Secretary Betsy DeVos has said the rule is too lenient, calling it free money, saying it's unfair to taxpayers. So DeVos delayed processing these claims. Also instead of granting full loan forgiveness, the department tried to make a new argument - basically that defrauded borrowers who end up earning a decent wage anyway should not have their loans totally forgiven.

And we know that at least as of June, roughly 210,000 borrowers are still waiting - including Alicia Davis - to have their claims processed. We don't know how many more have filed claims since then. That's just one of the many things that the chairman of the House Education Committee, Bobby Scott, is hoping to learn from these documents.

GREENE: OK. So, I mean, it sounds like DeVos has been transparent about, you know, her sort of disagreements with how this law is in place and who it should apply to and who it shouldn't apply to. So what is in these documents? And what are these lawmakers exactly hoping to find as they dig in here?

TURNER: Right. Well, we're not exactly sure what's in them yet. But I know that this comes after, really, months of back-and-forthing, pushing from Chairman Scott's office, not just for documents but actually for Secretary DeVos to testify before his committee, which is something she's tried really hard to avoid.

From these documents, we know that Chairman Scott not only wants more recent data, but he also wants internal emails, internal memos from the department that lay out why the department is not processing borrower defense claims. I spoke with the chairman yesterday. He said the fact that borrowers have been waiting with this debt, in many cases for several years, is really unfair.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

BOBBY SCOTT: You can't buy a house. Your credit is all messed up. You ought to be relieved of this if you've been defrauded. And that's exactly what's happened on many of these schools.

TURNER: And David, a committee aide told me that the department said it would provide the documents after Chairman Scott had already signed the subpoena.

GREENE: Are we hearing any more right now from DeVos and the department?

TURNER: Well, I've been back-and-forthing with them all week, again, because this is such a rolling story. And they insist this is much ado about nothing, that they have been transparent all along, working hard, they say, to comply with lawful oversight. But I was told by a spokesperson that Chairman Scott's office just wouldn't take yes for an answer.

GREENE: NPR education correspondent Cory Turner. Cory, thanks.

TURNER: Thank you, David.

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