Source: United States House of Representatives – Congresswoman Carolyn Maloney (12th District of New York)
Senator Gary Peters (D-MI) and Congresswoman Carolyn Maloney (D-NY) have called for an investigation into Secretary of Education Betsy DeVos for possible violations of the Privacy Act of 1974 and undermining legal protections of student borrowers.
Peters and Maloney wrote to the Department of Education’s Acting Inspector General, asking her to investigate allegations that DeVos illegally used information from the Social Security Administration to write a new loan forgiveness formula. The new formula was part of the “borrower defense” rule that allows the Secretary of Education to discharge the debt of student borrowers who were defrauded by their colleges.
In late 2019, DeVos released a formula that determined the amount of student debt relief defrauded students borrowers could receive. This “partial relief” formula considered predicted earnings of students based on the average earnings of students at that school compared to students who attended other schools. The forgiveness formula was then based on the difference in expected and current earnings.
Critics said that partial forgiveness went against the intent of the law meant to protect students from predatory colleges. Experts also believe the formula itself is flawed, saying the methodology is “wholly inappropriate and confuses many statistical concepts that aren’t meant to be used together.”
In the letter to the Inspector General, Peters and Maloney said they were “concerned that under the Trump Administration, the Department has applied a “partial relief” formula that drastically limits the assistance available to students who have been defrauded, typically by for-profit colleges.”
The members wrote the letter based on their oversight roles in Congress. Peters is the Ranking Member of the Senate Homeland Security and Governmental Affairs Committee. Maloney is the Chairwoman of the House Committee on Oversight and Reform.
Peters and Maloney expressed their concern that the formula was “arbitrarily short-changing struggling borrowers when they can least afford it.” And on top of that, this policy came just before the coronavirus pandemic hit the nation, leaving millions of Americans out of work.
DeVos has also been under scrutiny for the new “borrower defense” rule she proposed. This formula was meant to apply to the previous rule, but she wrote her own policy that created an extremely high standard for defrauded borrowers to get relief.
Congress passed a bill to overturn that rule in March. Trump vetoed that bill in May, sending it back to the House of Representatives where they will have the opportunity to override his veto.
You can find the full text of their letter here.