Following Concordia University Closure, Merkley Presses Secretary DeVos Over Federal Student Loan Discharge Requests

Following Concordia University Closure, Merkley Presses Secretary DeVos Over Federal Student Loan Discharge Requests

Letter follows announcement that thousands of students will be displaced

WASHINGTON, D.C. – Oregon’s U.S. Senator Jeff Merkley is pressing the Department of Education to review a substantial backlog of federal student loan discharge requests, after the abrupt announcement that Concordia University will close in May 2020.

Over 6,000 students are currently enrolled at Concordia University.

“I write with ongoing concerns regarding the U.S. Department of Education’s (‘Department’) continued backlog of federal student loan discharge requests under ‘borrower defense’ and the Department’s ongoing efforts to dismantle debt relief for students who have been cheated, misled, or defrauded by colleges or been displaced by a closed school,” the senator wrote.

“The Obama Administration’s 2016 borrower defense rule, which remains in effect, clearly articulates and details processes for students applying for borrower defense discharges or closed school discharge for students whose colleges collapse in the middle of their program,” he continued. “However, I remain deeply concerned by the Department’s refusal to help the thousands of borrowers who remain waiting for relief and efforts to effectively end debt relief.”

Concordia University is a private non-profit higher education institution that opened its doors in Northeast Portland in 1905. Since then, it has become the second-largest teacher preparation program by number of graduates in Oregon.

The closure, which will eliminate 1,518 jobs, comes amid an ongoing battle between lawmakers and the Department of Education over Secretary DeVos’ refusal to forgive the debts of tens of thousands of Americans who were victimized by abusive for-profit colleges or attended a school that closed. Since assuming office, DeVos has made it a priority to make it more difficult for students to have their federal student loans cancelled even if they were enrolled in college that closed.

The letter is among a series of recent actions by Senator Merkley to protect and advocate for the interests of students, including the introduction of the Protecting Students from Worthless Degrees Act, which would close loopholes that allow predatory for-profit colleges to use federal student loan programs to lure students into unaccredited degree programs and vortexes of debt.

Senator Merkley recently pressed Secretary DeVos on her refusal to provide relief to over 2,000 Oregon borrowers who have applied to have their federal loans discharged. It has been more than two years since the Oregon borrowers applied for relief and pending claims continue to balloon in size because of Secretary DeVos’ failure to review and respond to the applications.

The full text of the letter follows below and is available here.

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The Honorable Betsy DeVos

Secretary

U.S. Department of Education

400 Maryland Ave. SW

Washington, DC 20202

 

Dear Secretary DeVos,

 

I write with ongoing concerns regarding the U.S. Department of Education’s (“Department”) continued backlog of federal student loan discharge requests under “borrower defense” and the Department’s ongoing efforts to dismantle debt relief for students who have been cheated, misled, or defrauded by colleges or been displaced by a closed school.

 

Under the Borrower Defense to Repayment provision in the Higher Education Act, the Department has the legal authority to cancel the loans of students who were cheated, misled, or defrauded by colleges. The Obama Administration’s 2016 borrower defense rule, which remains in effect, clearly articulates and details processes for students applying for borrower defense discharges or closed school discharge for students whose colleges collapse in the middle of their program. However, I remain deeply concerned by the Department’s refusal to help the thousands of borrowers who remain waiting for relief and efforts to effectively ending debt relief.

 

On Monday, February, 10, 2020, Concordia University in Portland, Oregon abruptly announced that it would be closing at the end of the Spring 2020 semester. More than 6,000 students are currently enrolled. This latest closure underscores the need for the Department to take action on existing, pending borrower defense claims and new claims for borrower defense or applications for closed school discharge without delay.

 

Earlier this year, I wrote to you about the status of the two-thirds of the 3,281 applications from Oregon borrowers that remain pending, including a group discharge application submitted over two years ago. Your response stated that the request for group relief are in “various stages of review” by the Department. Based on your response and your previous actions to collect debt on loans by students seeking borrower defense and inaction on pending borrower defense applications, I request answers to the following questions no later than Friday, March 13, 2020.

 

  1. Has the Department taken any action to provide discharges to Oregon borrowers with pending borrower defense claims? If not, why not?
  2. Has the Department notified borrowers who may be eligible for closed school discharge, including current Concordia University students and students who have withdrawn during the 120-day window prior to school closure?
  3. Has, or will, the Department notify borrowers attending Concordia University under what circumstances, based on current law and regulations, they may be eligible for a closed school discharge or borrow defense to repayment and the timing for filing such an application or claim? When will that notification occur?
  4. Has, or will, the Department notify borrower attending Concordia University about financial options available to them, including the following:
  5. Closed school loan discharge
  6. Debt relief on Title IV student loans under a borrower defense to repayment claim
  7. Adjustment to Title IV student loan annual and aggregate loan limits
  8. Pell eligibility restoration and adjustment to Pell eligibility caps
  9. GI Bill education benefits restoration and GI education benefit limits
  10. Placing federal loans in forbearance until a discharge decision is made, allowing students to stop or reduce the monthly payments on their federal loans
  11. Has, or will, the Department notify students who may be eligible for closed school discharge or borrower defense of a hotline number and business hours for such a hotline?
  12. Please provide copies of any documents, notifications, memoranda, or communications related to the Department’s efforts to communicate with current Concordia University students about their potential eligibility for borrower defense or closed school discharge.