DeVos Riles Democrats With Slow Review of 140,000 Dubious Loans

  • `Struggling borrowers’ need ‘full relief,’ Sen. Murray says
  • Secretary rejects criticism over cut to Special Olympics

Democrats pushed Education Secretary Betsy DeVos on why the department had seemingly stalled on forgiving federal student loans for students at schools that substantially misled them when they applied. The secretary was also put on the defensive for the second time this week over a proposed cut to the Special Olympics.

About 140,000 claims await a decision by the department on whether their loans will be forgiven. The department didn’t approve or deny any claims between July and October 2018, the last months for which the department provided data.

Sen. Patty Murray (D-Wash.) told DeVos during a Labor-HHS-Education Appropriations Subcommittee hearing that there was “nothing stopping you from giving full relief to struggling borrowers today.”

“I don’t understand why the department can’t fully discharge the loans today for tens of thousands who were defrauded years ago by Corinthian Colleges,” Murray said, referring to a for-profit chain that went bankrupt. Sen. Dick Durbin (D-Ill.) made a similar plea for the department to act on the claims.

DeVos said the department is working to process the claims. She said some loan discharges had been approved since data was last published, but was unable to say how many.

Photo by Chip Somodevilla/Getty Images
Education Secretary Betsy DeVos

The department initially delayed the Obama-era regulation that offered student loan forgiveness while it was rewritten. However, a federal judge declared in October 2018 that the rule needed to take effect.

The department also forgave $150 million in student loans last year through another part of the regulation dealing with schools that close while students are attending.

Special Olympics

Durbin also asked DeVos whether she supported cutting federal funding for the Special Olympics, as her department’s budget proposed. The secretary bristled, calling the questioning from the Senate’s No. 2 Democrat “disgusting” and “shameful.”

“Let’s not use disabled children in a twisted way for your political narrative,” DeVos said. While she personally supports the program, budget cuts were needed, she said.

The Trump administration proposed the same Special Olympics cut in the past two years — both times Congress voted to continue funding the program. It received $17.6 million for the current fiscal year, a slight increase from the year before. Subcommittee Chairman Roy Blunt(R-Mo.) said the program would be funded again this year.

Different Year, Same Budget

The department’s proposal for fiscal 2020 is similar to those submitted by the Trump administration in the past two years. It calls for an almost 10 percent decrease in funding, cutting 29 programs and taking $2 billion of the Pell Grant surplus.

DeVos defended the budget as making needed reductions to federal spending.

“American taxpayers cannot afford these sorts of increases,” DeVos said. “What’s more, this administration dispenses with the tired notion that more spending equals better results in education.”

Sen. Roy Blunt (R-Mo.) noted the similarities between current and previous administration proposals and said many of the programs on the White House’s chopping block would likely be funded by Congress.

“My guess is that the work of this committee will not be too much different than the work of this committee last year,” he said.

To contact the reporter on this story: Emily Wilkins in Washington at ewilkins@bgov.com

To contact the editors responsible for this story: Paul Hendrie at phendrie@bgov.com; Robin Meszoly at rmeszoly@bgov.com