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Betsy DeVos Is Making Life Harder For Students Who Have Been Screwed Over By Predatory, For-Profit Schools.
Obama's Education Department Went After Colleges That Were Accused Of Fraud; But Now, So Much for That.
The Department of Education, led by Betsy DeVoss, has put forth a plan that would make it very difficult for students who have been defrauded to get their loans forgiven or reduced, and it also would sharply lower the ways that students would be protected from fraudulent, for profit schools, like the Trump University was.
Consumer advocates are calling out against this new plan, stating that it puts students at risk for being taken once again.“These new regulations are really a giveaway to predatory for-profit colleges, especially the large chains, that have defrauded students at the behest of individual borrowers,” said Aaron Ament, whois the president of the National Student Legal Defense Network.
DeVoss has sculpted a plan that lets fraudulent schools off the hook for their actions,and leaves the defrauded in debt.
It would appear that this administration is only interested in students who come from well to do circumstances, valuing fake colleges, and making sure that only the upper class can afford to go to school.
The following edited report are some of the ways in which this new plan is predatory in how it treats student borrowers, all while it lets for-profit colleges off the hook if they screw students over.
Eliminating debt relief rules
Under a proposal unveiled recently, students who left failing or shuttered schools with worthless degrees and steep debt will now likely have a harder time convincing the Education Department their loan debts should be forgiven.
DeVos’ change raises the bar for filing a claim: In order to earn loan forgiveness, a student has to either prove a school intentionally defrauded her or go into default before even filing a claim to seek forgiveness. What’s more, the proposal eliminates a ban on mandatory arbitration clauses, meaning students may no longer be able to bring claims against an institution in court.
The other route to making a debt relief claim—falling into default—is also a horrible option that could ruin students’ credit if the debt isn’t ultimately forgiven.
Ending the requirement of gainful employment
Though no plans have officially been announced, the New York Times and Wall Street Journal reported on July 26 that Education Department officials plan to eliminate the so-called gainful employment rule, a 2016 safeguard that effectively threatened to withhold federal funds from all colleges that failed to prove their graduates can get jobs and pay off their student debt. In the past, for-profit graduates struggled to find jobs in their fields because their degree wasn’t recognized by regional accreditors; some even found it difficult to transfer credits to get a degree at a different school. All the while, they were required to pay off the loans they took out to earn those worthless degrees.
But the gainful employment rule never actually got off the ground: In July 2017, DeVos announced that its implementation would be delayed for two years. Now it seems like officials will just remove it instead.
Prospective students may never know just how schools are faring on post-graduate employment. Last January, the Education Department released data showing that more than 800 programs—98 percent of which were for-profit colleges—failed the agency’s standards under the gainful employment rule.
Gutting the unit that investigated fraud
[The] key internal enforcement unit that worked with state and other federal agencies to investigate deceptive practices at public and private colleges and universities, . . . was formed in February 2016, after state and federal investigations into accusations of fraud led to the closures of two of the country’s most recognized for-profit college operators, Corinthian Colleges and ITT Technical Institute. In one notable case, the unit worked with the Federal Trade Commission to investigate DeVry University for promoting false job placement claims in ads and recruiting, resulting in a settlement in October 2016.
But under DeVos, members of the unit have been reassigned. Once a dozen strong, the unit has reportedlydwindled to three staffers who have multiple responsibilities, including processing loan forgiveness applications. Education Department spokeswoman Elizabeth Hill blamed the diminishing staff on attrition and told the Times that the change in responsibilities “neither points to a curtailment of our school oversight efforts nor indicates a conscious effort to ignore ‘large-scale’ investigations.”
. . . in the Trump era, the gutting of the enforcement team “effectively killed” several fraud investigations into for-profit institutions, including into Bridgepoint Education and a separate inquiry into DeVry early last year.
Replacing full debt relief with partial forgiveness
Faced with a steep backlog of Corinthian College students unable to pay back their loans, the Education Department decided last December to try to make a “fair and efficient process” for filing for debt forgiveness.
But instead of fully forgiving debts, as the Obama administration had done, DeVos’ Education Department decided it would instead partially forgive students’ debts through a convoluted process that considered how much graduates made, on average, compared to peers in similar job programs.
Under the new proposed borrower defense rule introduced last week, the Education Department could grant partial relief “based on the degree of harm suffered by the borrower,” though it does not make clear how it would determine that calculation.
To read the entire report: