Betsy DeVos’ favored policies only hurt the poorest of our communities.
Since her nomination for U.S. Secretary of Education, Betsy DeVos has been one of the most polarizing members of President Trump’s cabinet, particularly with regard to her views on school choice and voucher programs. However, this summer she ignited a different firestorm when she hit the reset button on consumer protections for student loans.
After she froze an Obama-era regulation known as the “borrower defense,” which erased the federal loan debt of students who attended for-profit colleges that closed amid fraud accusations, attorneys general in 18 states and the District of Columbia filed a lawsuit against her and the Department of Education. The lawsuit alleges that DeVos delayed the July 1 implementation of the Obama administration’s rules illegally. Moreover, the rules that DeVos froze would have banned mandatory arbitration agreements, which prevent wronged students from taking fraudulent schools to court. DeVos has struck a one-two punch: She eliminated a safety net for victims of deceitful business practices and blocked their ability to pursue justice. The 19 attorneys general are fully justified in going to bat for students in their jurisdictions.
President Obama’s sweeping action came after hundreds of for-profit colleges collapsed, including the behemoth Corinthian Colleges, which had faced years of complaints that it targeted vulnerable students with deceptive marketing and illegal recruitment practices. After it closed, about 80,000 students still faced debt collection from their loans.
Sen. Elizabeth Warren, who investigated Corinthian, penned a letter to then-Secretary of Education John King urging him to provide Corinthian students with debt relief. “It is unconscionable that instead of helping these borrowers, vast numbers of Corinthian victims are currently being hounded by the department’s debt collectors — many having their credit slammed, their tax refunds seized, their Social Security and Earned Income Tax Credit payments reduced, or wages garnished—all to pay fraudulent debts,” Warren said. The Education Department eventually held Corinthian accountable through its crackdown, but DeVos has threatened that precedent.
DeVos claimed that the regulations “missed the opportunity to get it right” and resulted in a “muddled process that’s unfair to students and schools.” And yet it’s hard to see how the Secretary’s actions could be construed as fair to students. These predatory for-profit schools often prey upon students with poor preparation, few skills, and little money. They overstate graduates’ abilities to secure good jobs, convince students to apply for loans that they have little hope of repaying, and in some cases persuade them into signing away their rights to sue should they discover how little they have to show for their costly investment. Moreover, the schools that DeVos and the Trump administration have elected to protect are strikingly similar to the now-defunct Trump University, which granted no credible degrees. Its faculty had no academic credentials and its students discovered that the lucrative promised careers in real estate were illusory.
DeVos’ claim that the “borrower defense” regulations are a burden on the taxpayer doesn’t hold water. According to the Education Department, the for-profit sector only contains eight percent of students enrolled in higher education but 15 percent of federally subsidized student loans. Many students enrolled in for-profit colleges and universities default, and when fraudulent campuses close, the federal government has often been left to bail out stranded students. Leaving students with no protection from predatory schools and no legal recourse is the equally heartless higher education equivalent of repealing Obamacare and leaving many Americans without any health insurance at all.
For-profit universities, and DeVos’ eagerness to protect them, represent a way in which the education system has failed the socioeconomically disadvantaged, who are overrepresented at for-profit schools and underrepresented at educational institutions that would give them a better shot. In other words, fraudulent schools target those who have the most to gain and the most to lose from a quality education or lack thereof. When decisions in this current administration must be made between coming to the aid of the “little guy” or siding with corporate interests, the little guy loses out. It’s clear that the Department of Education has the interests of the industry at heart. But these recent regulatory rollbacks run deeper: They legitimize predatory schools, set up students for exploitation and default, and deprive young people of the education that they desperately need in today’s fast-paced, information-based society. As the Secretary of Education, it’s DeVos’ responsibility to defend students’ rights to a fair education. She needs to do her job.