Editorial: Betsy DeVos sides with predatory for-profit colleges over America’s students
The future of the nation’s economy and the ability of its citizens to earn a decent living increasingly depend on having an educated population, with more people getting at least some college education after high school.
Despite that, the Trump administration is smoothing the way for unsavory practices in the world of higher education, making it harder for Americans to obtain the degrees or training they yearn to achieve. The administration’s failures to protect students from bad lenders and fraudulent colleges may brighten the bottom lines of some corporations, but it will also rob students of educational opportunity.
On Aug. 10, the U.S. Education Department formally announced its plans for a new policy that had long been rumored to be in the works: It wants to release for-profit colleges from a rule requiring them to show that students could reasonably expect to find a job in the field for which they were training. Adopted during the Obama administration, the rule was prompted by findings that many for-profit trade and technical schools were duping enrollees by advertising rosy employment futures that didn’t exist and inflating their graduation rates, then fast-talking low-income students into taking out loans they wouldn’t be able to pay off and tricking them into signing agreements that stripped them of their right to sue.
Betsy DeVos has been dragging her heels on forgiving the federal loans of former Corinthian students, even though they are legally entitled to that relief.
The so-called “gainful employment” rule protected taxpayers as well as students by denying federal funding and federally guaranteed student loans to schools that failed to meet the federal standard. Studies have found that about 13% of college students attended for-profit schools but accounted for half of all the student loan defaults, costing taxpayers billions of dollars.
Under the Obama administration, Corinthian Colleges was fined $30 million in 2015 for its habit of inflating graduation rates. It shut down, as did ITT Tech the following year. But Education Secretary Betsy DeVos has been dragging her heels when it comes to forgiving the federal loans of former Corinthian students, even though they are legally entitled to that relief.
DeVos also disregarded her own staff’s objections when she revived the Accrediting Council for Independent Colleges and Schools. The Obama administration had stripped that agency of its powers after it gave positive reviews to Corinthian and ITT Tech despite strong evidence that both chains were offering prospective students an unrealistic idea of their chances for graduation and job placement. After a federal judge found that the Obama administration had failed to follow the proper procedural rules, the matter was sent to DeVos for reconsideration, not necessarily for reinstatement.
The problems at many for-profit colleges, though, pale in comparison to the ones at the companies servicing student loans. Seventy percent of college students graduate with significant amounts of debt, and many of these students have been subjected to unsavory practices including high-interest lending, illegal fees and failures to credit payments made. Some lenders also have neglected to direct students to less-expensive repayment options when they ran into trouble repaying their loans.
Sadly, the Trump administration has made several moves to quell enforcement of laws against predatory college-loan practices. Last week, Seth Frotman, the student loan ombudsman at the Consumer Financial Protection Bureau, quit his job because of what he described as a hostile attitude toward consumer protection. His office had been an aggressive defender of students, recovering $750 million in questionable fees and other improper charges by lenders.
Frotman’s resignation letter held little back; he accused the Trump administration of undermining efforts to protect students and recent graduates. According to Frotman, the sabotage included folding his department into another office that has a different mission; DeVos announcing that her agency no longer would share information that would help the consumer bureau with its enforcement efforts; and higher-ups at the CFPB holding back a report showing that banks dealing in student loans were imposing excessive fees.
These two issues — bad for-profit colleges and bad student lenders — aren’t matters of political philosophy. Consumer fraud is against the law, and yet the administration is sending loud signals that it has no interest in enforcement.
About 20 states so far have begun to pick up where the CFPB and the Education Department have dropped the ball, though the administration has been trying to curb even those efforts by declaring that states cannot intervene in federally guaranteed loans. Meanwhile, students in more than half the states — the ones that have taken no action to protect them — remain at the mercy of lenders and for-profit colleges, and of an administration that doesn’t seem to mind the companies’ unsavory practices.
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5:13 p.m.: This editorial was edited further for clarity.
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