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Chair Foxx Reacts to GAO Report; Democrats Attempt to Manipulate Borrower Defense for Student Loan Scheme

WASHINGTON, D.C., October 24, 2024
WASHINGTON – Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) today bashed the Biden-Harris administration for its attempts to ram through its student loan debt scheme by any means possible. This time, a new report from the Government Accountability Office (GAO) shows a shameless attempt to expand “borrower defense” to force taxpayers to foot the bill for others’ student loans. 

“When all you’ve got is a hammer, everything looks like a nail. For years, Democrat administrations have used illegal interpretations of the borrower defense law and other student loan schemes as tools to give the far left what it wants,” said Chairwoman Foxx. “Now, we’ve got the numbers to confirm it. The Biden-Harris administration is piggybacking onto the Obama-Biden administration’s legacy of dramatic government overreach and complete disrespect for the law and taxpayer dollars.” 

In compiling the report, originally requested by Foxx in November 2016, GAO conducted an audit of loans discharged (i.e., “forgiven”) by the U.S. Department of Education (ED) under a process called borrower defense to repayment. The report found that… 
  • As of April 30, 2024, ED had discharged $17.2 billion in federal student loans for 974,820 borrowers;
  • One percent of applications submitted for borrower defense were denied;
  • All approved applicants received a complete and total discharge of their loans; and
  • Between 1995 and 2015, very few individuals sought borrower defense, to the point that ED did not have staff dedicated to adjudicating applications.
Read the full report here.

BACKGROUND: 
In 2015, the Obama-Biden administration issued new regulations on borrower defense and encouraged tens of thousands of borrowers—whether they were harmed or not—to apply to have their loans forgiven. For the first 20 years of the rule prior to these changes, there were 59 claims. The Obama-Biden administration’s actions encouraged more and more applications from borrowers, without any need to demonstrate financial harm, and promoted illegal group loan discharges which are not directly authorized or even mentioned by the Higher Education Act. The result was the number of applications jumping to more than 300,000. The Biden-Harris administration is continuing this Obama precedent to achieve the Democrat objective of transferring student loans to taxpayers.
  • In October 2023, Chairwoman Foxx subpoenaed Secretary Miguel Cardona for documents related to borrower defense.
  • In May 2022, Chairwoman Foxx called on the U.S. Department of Justice to intervene in ED’s attempts to abandon due process in its rewrite of the borrower defense rules.
  • In September 2018, Chairwoman Foxx wrote to then-Secretary Betsy DeVos expressing concern that regulations authored by the Obama-Biden administration “drastically exceeded the scope of current law to the detriment of students, institutions, and taxpayers.”
  • In November 2016, Foxx, then Chairwoman of the subcommittee responsible for postsecondary education, requested the report from the GAO, wanting to “ensure taxpayers are protected against abuse and fraudulent claims through the borrower defense provisions as currently exist.”
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