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Betsy DeVos takes heat from House Democrats over $5 billion school choice proposal

Posted at 3:58 PM, Apr 10, 2019

Democrats took aim at Education Secretary Betsy DeVos ' proposed school choice tax credit at a House Education and Labor hearing Wednesday, arguing that it could siphon away funds from public schools.

DeVos said the program, known as Education Freedom Scholarships, "won't take a single dollar from local public schools, school teachers or public school students."

But several Democratic members of the committee disputed her claim, arguing that the scholarship program would end up harming public schools.

In a testy exchange, Ohio Democratic Rep. Marcia Fudge started by suggesting that DeVos isn't looking out for all students, calling the program a "shell game" that benefits some children at the expense of those in the public school system.

"Do you realize it is your responsibility to educate every child in the United States," she asked.

DeVos declined to provide a yes or no answer. "It's my responsibility to be the Secretary of Education," she began before Fudge interrupted.

"You're really good at evading. That's a really simple question," Fudge said.

DeVos has long been a proponent of school choice policies. She and her husband opened a charter school of their own and spent millions of dollars over the years to lobby for big changes to Michigan schools, among other issues.

As proposed, people who make voluntary donations to the scholarship fund would receive a dollar-for-dollar federal tax credit. Students would be allowed to use the money to go to a private or public school, including charters, outside their local district.

The department is asking the Treasury to appropriate up to $5 billion a year for the new program. That money doesn't come from the Education Department's budget because it would instead be used to pay for the tax credit. But Oregon Democratic Rep. Suzanne Bonamici argued that it still amounts to taking $5 billion from taxpayers that could be used for something else, like Pell Grants awarded to low-income college students.

"It is public money if it is $5 billion less in revenue," she said.

DeVos also took heat Wednesday for not processing any loan forgiveness claims under the Borrower Defense to Repayment rule, after a court ordered her to implement the regulation in October.

More than 158,000 people , many of whom attended for-profit colleges, are waiting to hear whether their debt will be canceled.

When pressed by California Democratic Rep. Mark Takano, DeVos confirmed that no claims had been approved or denied since the court order.

"It is true none have been approved in last several months," she said.

Under DeVos, the Department of Education delayed implementation of the Obama-era rule that allows people to apply for loan forgiveness if they believe their school defrauded them. If a school misled a student about whether their program was accredited, or how likely they would be to get a job after finishing, a student might be eligible for relief.

The department stopped processing the Borrower Defense claims after it was sued by Democratic attorneys general from 18 states and Washington, DC, over the delay. The court sided with the group last year.

At a Senate hearing two weeks ago , DeVos said she did not know how many claims had been processed since the court ordered implementation of the rule -- though she said that the department is "reviewing them regularly."

Meanwhile, the department moved forward with granting automatic loan forgiveness claims to those whose schools closed while they were enrolled. Under the rule, those students don't have to submit documents proving they were defrauded.

On Wednesday, DeVos said that 16,519 of those claims have been granted since the court ruling.

But Takano questioned why those claims had been prioritized over those from students who are arguing their schools defrauded them but hadn't closed. When a school closes, taxpayers are on the hook for the outstanding federal student loan, while the school is on the hook if it committed wrongdoing but remains open.

"Knowing this, a reasonable and prudent person, might pause at the idea that the department may have the perverse incentive to intentionally delay implementation of the Borrower Defense rule to protect the financial interests of these for-profit institutions and their investors," he said.

When asked if she or her aides directed staff to cherry pick claims, DeVos said the department was focused on addressing all of the loan forgiveness claims.

"I am very troubled by your non-answers today. Madam secretary, there is no freedom in a student being obligated to pay off a loan from a school that has defrauded them. It's an unjust burden," Takano said.