A top GOP lawmaker is taking legal action to scrutinize the Education Department's authority to cancel student debt for defrauded borrowers

Rep. Virginia Foxx
Rep. Virginia Foxx, R-N.C., speaks during a news conference with other House Republican members in Washington on Tuesday, March 9, 2021.Caroline Brehman/CQ-Roll Call, Inc via Getty Images
  • GOP Rep. Virginia Foxx issued a subpoena to the Education Department on Tuesday.

  • The subpoena requested a range of documents relating to the department's borrower defense actions.

  • Foxx said the department has failed to provide information on its authority for that debt relief.

A top Republican lawmaker is turning to legal action to get answers from the Education Department on student-debt relief.

On Tuesday, Chair of the House education committee Virginia Foxx issued a subpoena to Education Secretary Miguel Cardona to get information on the Education Department's relief through borrower defense to repayment. Borrower defense claims are forms a borrower can submit if they believe they were defrauded by the school they attended, and if approved, their loans from that school would be discharged.

Foxx isn't convinced of the department's authority to grant that relief.

She wrote in her subpoena cover letter — first reviewed by Insider — that beginning in May 2023, she submitted requests to the department for information on the actions it has taken to approve debt discharged through borrower defense, and she has yet to receive the requested documents. The department instead said that the Government Accountability Office has to first complete its own investigation on borrower defense.

"This is the first time the Committee has subpoenaed the Education Department, and it is a measure that I do not take lightly. Secretary Cardona sat before this Committee in May and gave us his word that he would assist us in our oversight efforts," Foxx told Insider in a statement.

"Clearly, Secretary Cardona's word doesn't mean much," she said. "His lack of candor not only blocks the Committee from doing its job, but it also leaves students, borrowers, and institutions in the dark. We intend to get the answers for the American people."

An Education Department spokesperson told Insider that "the Department is unapologetically proud of our efforts to fix borrower defense that have helped nearly 1.1 million students get $14.8 billion in relief from notorious predatory institutions."

"While Congressional Republican Leadership of the Education and Workforce Committee stand by these predatory colleges, the Department has the backs of borrowers who were taken advantage of and will continue to hold colleges accountable for their illegal actions toward students," the spokesperson added. "The Department has already been responsive to the Committee's requests and this escalatory action is inappropriate. Despite this political stunt, we remain committed to cooperating with Congress in good faith." 

Foxx's first request for information was on May 24, regarding $6 billion in relief for 200,000 borrowers through a settlement, Sweet v. Cardona. While the lawsuit originated under former President Donald Trump over stalled borrower defense claims, it was not resolved under his administration, leaving Cardona to agree to the settlement last year.

The settlement led to a group discharge for impacted borrowers, rather than going through each borrowers' claims individually, which Foxx said raised questions about the department's authority.

The subpoena sent on Tuesday requests a range of documents by November 14 including any communications related to the Sweet v. Cardona settlement, documents describing the legal authority for borrower defense claims, and the number of borrowers who received relief under Cardona through borrower defense.

Biden's Education Department has consistently stood by its legal authority to approve borrower defense claims for defrauded borrowers. In October 2022, it released new regulations to streamline the borrower defense process by allowing borrowers to file claims individually or as a group. It also lays out a process for a department to recoup funds from a school over approved claims.

The regulations state that these changes are authorized under the Higher Education Act of 1965. "Despite the presence of these discharge authorities for years, the Department is concerned that too many borrowers have been unable to access loan relief authorized by statute," the rule says.

However, a conservative group in August filed a lawsuit that blocked those latest changes, meaning the department can only process claims under earlier borrower defense rules. A department spokesperson said at the time that the department "won't back down in our efforts to take on predatory colleges, provide relief to borrowers who have been cheated or had their school close, and hold institutions accountable for deceptive schemes."

Advocates have also stood by the legality of borrower defense rules. Aaron Ament, president of borrower protection group Student Defense, previously said that "defrauded borrowers are legally entitled to relief and their institutions should be held accountable."

Read the original article on Business Insider