I 

116TH CONGRESS 

1ST SESSION H. R. 3662 

To amend the Higher Education Act of 1965 to ensure that student borrowers 

are provided relief from their student loans in the instance of substantial 

misrepresentation or omission by an institution of higher education. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 10, 2019 

Mrs. MCBATH (for herself, Ms. FINKENAUER, Ms. PORTER, Mrs. AXNE, Ms. 

DAVIDS of Kansas, and Ms. SCANLON) introduced the following bill; 

which was referred to the Committee on Education and Labor 

A BILL 

To amend the Higher Education Act of 1965 to ensure 

that student borrowers are provided relief from their 

student loans in the instance of substantial misrepresentation or omission by an institution of higher education. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Relief for Defrauded 

5 Students Act of 2019’’. 


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1 SEC. 2. AMENDMENTS TO TERMS AND CONDITIONS OF BOR2 ROWER DEFENSES. 

3 Section 455(h) of the Higher Education Act of 1965 

4 (20 U.S.C. 1087e(h)) is amended to read as follows: 

5 ‘‘(h) BORROWER DEFENSES.— 

6 ‘‘(1) IN GENERAL.—Notwithstanding any other 

7 provision of State or Federal law, a defense to re8 payment of a loan under this part shall include— 

9 ‘‘(A) a substantial misrepresentation under 

10 by an institution of higher education described 

11 in section 487(c)(3); 

12 ‘‘(B) an act or omission of an institution 

13 of higher education that would give rise to a 

14 cause of action against such institution of high15 er education under applicable State law; or 

16 ‘‘(C) any other act or omission by an insti17 tution of higher education that the Secretary 

18 specifies in the regulations under paragraph 

19 (3). 

20 ‘‘(2) PROCEDURES.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall, 

22 for each borrower who submits to the Secretary 

23 an application asserting a defense to repayment 

24 of a loan made under this part— 

25 ‘‘(i) provide an expeditious and fair 

26 process to consider such application (withVerDate Sep 11 2014 21:27 Jul 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3662.IH H3662

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1 out regard to whether the application is 

2 submitted by an individual borrower, a 

3 group of borrowers, or a representative of 

4 such individual or group); and 

5 ‘‘(ii) determine the entitlement of the 

6 borrower to relief based on all evidence 

7 available to the Department. 

8 ‘‘(B) INDEPENDENT DETERMINATION.—A 

9 determination under subparagraph (A)(ii) with 

10 respect to a borrower shall be independent of 

11 any action that the Department may take under 

12 this Act to recover funds from an institution of 

13 higher education for an act or omission related 

14 to such determination. 

15 ‘‘(C) CANCELLATION OF DEBT.—In a case 

16 in which the Secretary determines under sub17 paragraph (A)(ii) that the borrower is entitled 

18 to relief, the Secretary shall— 

19 ‘‘(i) cancel any outstanding balance of 

20 principal and interest due on each loan 

21 made under this part that the borrower re22 ceived for enrollment at the institution of 

23 higher education against which the bor24 rower is asserting the defense to repay25 ment; and 


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1 ‘‘(ii) return to the borrower the 

2 amount of any payments made on such 

3 loans. 

4 ‘‘(3) REGULATIONS.—The Secretary shall speci5 fy in regulations which acts or omissions of an insti6 tution of higher education a borrower may assert as 

7 a defense to repayment of a loan made under this 

8 part, except that in no event may a borrower recover 

9 from the Secretary, in any action arising from or re10 lating to a loan made under this part, an amount in 

11 excess of the amount such borrower has repaid on 

12 such loan.’’. 

Æ 


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