NAICU Washington Update

House Passes Legislation to Overturn of Borrower Defenses Regulations

January 16, 2020

The U.S. House of Representatives passed a resolution to strike the borrower defenses to repayment regulations promulgated by the Department of Education in September 2019.
Democrats in the House argue that the borrower defenses to repayment regulations published by the Trump Administration place an undue burden on students to prove they were misled by unscrupulous actors. By striking the Trump Administration’s rule, Democrats hope to return to the more borrower-friendly rules published near the end of the Obama Administration.
House Democrats are using the Congressional Review Act as a means to fast-track the legislation to the Senate floor, allowing the bill to be considered and passed by a simple majority vote rather than the 60-vote threshold needed under normal filibuster rules. It is unlikely that the Republican-controlled Senate will pass the borrower defenses to repayment resolution.
The Congressional Review Act is not a commonly used legislative process, but was successfully employed in 2017 by House and Senate Republicans to strike the controversial Obama-era teacher preparation program regulations.
Should the Democrats’ legislative gambit fail to get Senate support, then the regulations published by the Trump Administration last September will go into effect on July 1, 2020.  Neither version is likely to greatly impact private, nonprofit institutions.

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