06/16/21
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) today at a Senate Subcommittee hearing on the Department of Education budget proposal for Fiscal Year 2022 (FY22) urged Education Secretary Miguel Cardona to bring greater accountability and oversight to the for-profit higher education industry. In his remarks, Durbin highlighted that for-profit colleges and universities enroll only eight percent of all post-secondary students, but account for 30 percent of federal student loan defaults. Durbin also said that during the pandemic, enrollments in for-profit colleges rose three percent, while traditional colleges and universities are struggling to enroll students.
“[This] raises a serious political question about a college that is failing so many students and yet receiving such handsome federal funding, ”Durbin said. “The record that your predecessor set in this area is not one we want to see.”
Durbin called on Cardona to reform the ministry’s policy on challenging student borrower claims for undue hardship in bankruptcy. Current law prohibits the repayment of student loans in bankruptcy with one exception: if the borrower experiences “undue hardship”. Unreasonable hardship has been defined by the courts in such a way that it is almost impossible to successfully assert claims. In addition, the Ministry of Education instructs its contractors to challenge unjustified hardship cases in court – even in straightforward cases where the borrower should prevail. Durbin has long urged the ministry to provide guidance to its contractors setting out cases where an unjustified hardship case should not be challenged. His letter to former Minister of Education Arne Duncan is available here, and his letter to former Minister of Education Betsy DeVos is available here.
“I don’t think any of us would want to try to defend ourselves in public [the policies used to challenge undue hardship claims in bankruptcy by the Department and its contractors]. If someone goes before an insolvency court and tries with one narrow exception in the bankruptcy code for student loans – undue hardship – they have no chance. “
Cardona replied that this is a top priority for the agency and that it is time to put students first. He said the ministry has done a disservice to borrowers in the past and it is time to develop a consumer protection mentality and put students at the center of the conversation. Cardona also said it recently allocated $ 1.5 billion in student borrower defense relief and approved $ 500 million in layoffs.
The video of Durbin’s remarks from the hearing is available here.
Audio of Durbin’s remarks from the hearing is available here.
Footage of Durbin’s remarks from the hearing is available here for television broadcasters.
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source https://collegeeducationnewsllc.com/press-release-press-releases-newsroom/
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