September 16, 2019

Senators Warren, Brown, Hirono, and Murphy, Representatives Hayes, Scanlon, and McBath Introduce Bicameral Legislation Restoring Pell Grant Eligibility to Victims of Predatory For-Profit Colleges

Warren, Colleagues Call for Pell Grant Eligibility to be Restored for Defrauded Students

Bill Text

WASHINGTON – Last week, Senator Elizabeth Warren (D-Mass) and Representative Jahana Hayes (D-Conn.) along with Senators Sherrod Brown (D-Ohio), Mazie Hirono (D-Hawaii), and Chris Murphy (D-Conn) as well as Representatives Mary Gay Scanlon (D-Pa.), and Lucy McBath (D-Ga.) reintroduced the Pell Grant Restoration Act in both the House and Senate. This critical legislation would amend Title IV of the Higher Education Act to restore students’ Pell Grant eligibility for any period of time during which they would have qualified for loan forgiveness due to school closure or institutional fraud or misconduct.

Under existing federal law, all students are entitled to 12 semesters of Pell Grant eligibility. Students that were cheated, or were attending a for-profit college when it closed, used Pell Grants to do so, and now find themselves trying to attain an actual education without Pell Grant assistance.

This results in a situation where students are stuck with mounds of debt, credits or credentials with little to no value, and no means to acquire the education necessary to secure gainful employment.

Sen. Warren said, “Students who get cheated by a predatory, for-profit college should not lose their Pell Grant eligibility. I’m glad to reintroduce this bill with Representatives Hayes, Scanlon, and McBath because our government should not be punishing students for getting scammed.”

Rep. Hayes said, “As a Pell Grant recipient, I know just how vital a lifeline it can be in helping students on their path towards a degree. We should be working to help students defrauded by for-profit colleges, not trapping them without a useable degree and no means to pay. One way to do that is to restore Pell Grant eligibility to the victims of predatory for-profit colleges. I thank Senator Warren and all my colleagues for joining me in advocating to fix this deep injustice.”

Rep. Scanlon said, “We should not be punishing students who fall victim to fraud and abuse by predatory colleges, or who have the rug pulled out from under them when their school closes. By restoring Pell eligibility for students who otherwise qualify through loan forgiveness because of fraud or closure, we’re ensuring students get a fair shot at attaining a higher education credential. I am proud to co-lead this legislation and commend Rep. Hayes for her leadership in restoring the rights of America’s students.”

Rep. McBath said, “So many of our students work hard every day to earn an education and chase after their dreams. Our children should not be punished and lose their Pell Grant eligibility for the actions of fraudulent colleges. Hard working Americans from every community deserve a fair shot at a college education.” 

Every year, more than $30 billion in Pell Grants is distributed to over 7 million students across the country, providing desperately needed aid for students seeking to afford the skyrocketing cost of higher education. Since the collapse of for-profit giants Corinthian Colleges, ITT Technical Institute, and the Education Corporation of America, the Department of Education has received over 240,000 applications for Borrower Defense, meaning thousands of students across the country are potentially eligible for Pell Grant restoration.

The Pell Grant Restoration Act is cosponsored by Assistant Speaker Ben Ray Luján (D-N.M.) and Representatives Jim Langevin (D-R.I.), Grace Meng (D-N.Y.), Suzan DelBene (D-Wash.), Gregorio Kilili Camacho Sablan (D-Northern Marina Islands), Barbara Lee (D-Calif.), Mark Pocan (D-Wis.), and Gwen Moore (D-Wis.).

The bill has been endorsed by the National Education Association and the Connecticut Education Association.

Senator Warren is introducing the Pell Grant Restoration Act today for the third time. She first introduced it in 2015, alongside then-Senator Barbara Boxer (D-Calif.) and then-Ranking Member of the House Education and Labor Committee Bobby Scott (D-Va.). She reintroduced the bill in 2017, alongside Mazie Hirono (D-Hawaii), Sherrod Brown (D-Ohio), and Chris Murphy (D-Conn.), and an amendment modeled on the Pell Grant Restoration Act was included in the Senate FY2018 Labor, Health and Human Services, and Education Appropriations bill and committee report.

Senator Warren has also successfully fought for students cheated by for-profit colleges to get their federal student loans cancelled, tax free. In 2014, Senator Warren forced the Department of Education to acknowledge that students defrauded by their colleges had a right to debt cancellation and urged the Department to provide that relief. Through public letters, staff investigations, public awareness campaigns and coordination with state officials – Warren urged more and faster relief for cheated students. To date, the Education Department has announced student loan cancellations for more than 28,000 former students across the country cheated by Corinthian Colleges and some 4,500 Massachusetts students cheated by the American Career Institute.