Scott, Trahan Seek Explanation for Education Department’s Scheme to Deny Full Debt Relief for Thousands of Defrauded Borrowers

February 3, 2020
Press Release
“The importance of this formula for hundreds of thousands of borrowers demands the Department be as transparent as possible and provide comprehensive data and methodology information to the public.”

As originally released by the Committee on Education & Labor

WASHINGTON, DC Today, Committee on Education and Labor Chairman Bobby Scott (VA-03) and Representative Lori Trahan (MA-03) sent a letter to Education Department Secretary Betsy DeVos requesting documents and further information regarding the Department’s deeply flawed partial relief formula and the Department’s efforts to alter the formula.  

Two days before Secretary DeVos’ testimony is before the Committee, the Department unveiled a new formula to process claims by defrauded borrowers from the now defunct Corinthian Colleges and ITT Technical Institute. The Department declared the formula to be “a scientifically robust statistical methodology to determine harm.” The Members note, however, that the underlying methodology of the formula is nonsensical — making it essentially impossible for cohorts of borrowers from Corinthian and ITT to ever qualify for full relief from their debt.

Additionally, the Members raise serious concerns that, without notification, the published formula and supporting documents were altered immediately following Secretary DeVos’ testimony. The Members request documents outlining steps the Department took to develop and approve its partial relief formula, as well as what internal decisions resulted in the partial relief methodology being altered after Secretary DeVos’ testimony.  

“The importance of this formula for hundreds of thousands of borrowers demands the Department be as transparent as possible and provide comprehensive data and methodology information to the public,” the Members wrote. “This Administration’s pursuit of a partial relief formula runs counter to both recommendations of career Department staff and the policies of the previous Administration, and we fear will result in defaulted borrowers continuing to be saddled with debt that predatory colleges mislead them into incurring based on the false promise that their education would be an investment in their future.”

To read the letter to Secretary DeVos, click here.

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