Not every college graduate is aiming for the job with the biggest possible paycheck. Many hope to pursue intrinsically rewarding careers by serving in government or teaching or working for charitable organizations. These jobs don’t pay particularly well, but they are of enormous importance to our society and economy.
That’s why, in 2007, Congress created the Public Service Loan Forgiveness program, which is supposed to work the way its title suggests it would: After a college graduate works for 10 years in one of the approved public-service categories, whatever remaining student loan debt he or she has is forgiven.
Theoretically, at least.
In reality it’s not going so well. And it is not just this one loan-forgiveness program that is in trouble. In fact, pretty much everything having to do with college debt is messed up at the U.S. Education Department under Secretary Betsy DeVos, who has consistently avoided giving students the help to which they’re entitled. You could say she’s moved glacially on student debt relief — except that in this era of climate change, the glaciers might just be outpacing her.
Among those who have had to wait too long for debt relief are more than 200,000 students who say they were tricked into taking valueless courses at for-profit college chains such as the now-defunct ITT Technical Institute and Corinthian Colleges. DeVos’ own staff found that those schools defrauded students by making misleading assurances about the jobs that students would find after training and about the money they would earn.
But DeVos and her agency are 18 months behind on processing the claims of fraud. The debt relief was promised in a rule by the Obama administration. DeVos was even fined $100,000 in October for violating a judge’s order to halt debt collection against former Corinthian students.
Is she grossly incompetent, unheeding of the law, or actively hostile to students seeking debt relief? It’s hard to say.
The Public Service Loan Forgiveness program started long before DeVos took office, but the first 10 years ended in 2017, which made her responsible for the program’s implementation. The rate of approvals granted by her department to applicants was devastatingly low at 1%. So in 2018, Congress temporarily extended the program to allow more college graduates to qualify. The approval rate remained at 1%.
Many of the denials were valid, but not 99% of the total claims. One serious problem was that DeVos hadn’t created the simple application process that she was required to under the law. Applicants for the expanded program also had to fill out the application for the original debt forgiveness program, and according to a September report by the General Accounting Office, this information wasn’t made clear to those putting in their paperwork.
The DeVos policy “created a confusing process for borrowers,” the report said. In addition, it said, the denial letters don’t include full information on how to appeal the decisions.
There’s nothing new or surprising about DeVos slow-walking or trying to undo policies laid down by the previous administration, but she has lost round after round in court after she bungled the required procedures for changing the Obama-era rule. She also has gone out of her way to protect for-profit colleges, which have much higher rates of fraud claims and student loan defaults than other postsecondary schools, by gutting rules that required them to show halfway-decent results or close down. Such rules are needed not just to protect the many low-income students who attend for-profit schools but to protect the taxpayers, who bear the financial brunt of defaults.
Earlier this month, the Education Department unveiled a set of rules for receiving debt relief from the defunct for-profit colleges that demands a dramatically higher level of proof from the victims, including showing specific evidence that they made their decision to attend based on a recruiter’s false claims and evidence that the recruiter knew the claims were false. How are individual students supposed to come up with evidence that in the first case probably doesn’t exist, and in the second case isn’t obtainable by people who don’t have a cadre of lawyers backing them.
It’s not that DeVos should deliver blanket debt relief to anyone who files a claim. Applicants should be able to show that they were in fact defrauded and harmed financially as a result.
She just needs to treat American college students fairly, something she seems unwilling or incapable of doing.