President’s team gives predatory colleges a pass
President Trump, who paid $25 million to settle allegations he defrauded Trump University students, and whose private-school education was covered entirely by his parents, was handed a legal defeat last week in his efforts to ignore a rule enacted by the Obama administration to protect student borrowers.
Am I being unduly harsh? Not at all.
The Trump administration, with wealthy, let-them-eat-cake Education Secretary Betsy DeVos riding point, did its best to avoid enforcing a rule put in place by President Obama after the messy 2015 collapse of for-profit Corinthian Colleges.
Santa Ana-based Corinthian and 24 subsidiaries filed for bankruptcy protection after being fined $30 million for misleading students about their employment prospects. California subsequently won a nearly $1.2-billion judgment against Corinthian.
A key element of the Obama administration’s rule, known as the borrower defense, prohibited forprofit colleges like Corinthian from forcing students
to waive their right to sue or join class-action lawsuits as a condition of enrolling.
The rule was supposed to take effect in July 2017. The Trump administration dragged its feet in implementing it, claiming it was too tough on the for-profit college industry, which lobbied aggressively against it.
A federal court declared Wednesday that the administration’s go-slow stance was unlawful and “arbitrary and capricious.”
On Friday, lawyers for the Education Department asked U.S. District Judge Randolph Moss for more time to review the Obamaera rule, which, again, was supposed to take effect more than a year ago.
The department also asked for a 60-day grace period if the court insists it uphold the rule, which, one more time, the department was supposed to have done more than a year ago.
Moss did not say when he would issue a ruling. As things stand, though, there’s no question in his mind that the Trump administration could use some schooling.
“This case is not one in which delay only freezes the status quo; borrowers continue to be hurt every day,” Moss wrote in a 57-page opinion.
“The delay harms not only borrowers like Plain-
tiffs who have already left predatory institutions and are saddled with insurmountable debt and worthless educations, but also current and future students.”
Let’s underline some of those points: “Borrowers continue to be hurt” … “predatory institutions” … “insurmountable debt” … “worthless educations.”
Let’s also highlight Moss’ conclusion that arguments presented in court by government officials seeking to delay the rule were “procedurally defective” and “lack any meaningful analysis.”
Now let’s appreciate the spectacle of our billionaire president and his billionaire Education secretary, neither of whom have ever attended a public school or borrowed money for higher education, attempting to mitigate a rule imposed after thousands of students were cheated by scheming, fraudulent for-profit colleges.
“The administration’s position was that it would be too burdensome for these companies to comply with a rule protecting students,” said Adam Pulver, an attorney with the advocacy group Public Citizen, which sued to force the Trump administration to follow the law.
“They sided with the industry,” he told me. “And for the industry, it’s just cheaper to defraud people rather than be honest and transparent.”
Last week’s ruling addressed both Public Citizen’s lawsuit and a similar action brought by California and 18 other states.
California Atty. Gen. Xavier Becerra called the decision “a huge win.”
“The court made it clear that they broke the law,” he told me. “This was the Trump administration thinking they could make their own rules.”
Shockingly, but perhaps not surprisingly, the administration made clear from Day One that it didn’t like the idea of empowering students to stand up to greedy for-profit colleges — institutions that bear a more than passing resemblance to now-defunct Trump University.
In hitting the pause button on the Obama administration’s rule, DeVos cited a federal lawsuit filed in May 2017 by an association of California for-profit colleges challenging the greater accountability.
She called the Obama rule “a muddled process that’s unfair to students and schools,” and said she intended to draw up more industry-friendly regulations.
“It’s time for a regulatory reset,” DeVos declared.
This from an administration whose leader pledged on the campaign trail that he would eliminate most government regulations because they were “stopping businesses from growing.”
What makes Trump’s and DeVos’ attacks on students particularly shameless is that it targeted primarily young people who want to better themselves and, in so doing, help boost the country’s economic fortunes.
These aren’t people born with silver spoons in their mouths. By and large, they’re low- and middleincome folk who believe that hard work will be rewarded, and who are prepared to sacrifice to get ahead.
You know, the “forgotten men and women” that Trump says he was born to defend.
Toby Merrill, director of Harvard University’s Project on Predatory Student Lending, said last week’s ruling makes clear that the administration’s efforts to undermine students’ legal safeguards “were illegal and had no basis in fact or the law.”
“This is a major victory for student borrowers and for anyone who cares about having a government that operates under the rule of law, instead of as a pawn of the for-profit college industry,” he said.
I reached out to the Education Department for comment. No one got back to me.
But the administration hasn’t been shy in voicing its stand on predatory lending: It doesn’t see what the big deal is.
Just as the Consumer Financial Protection Bureau under Trump has adopted a kumbaya approach to payday lenders, DeVos’ Education Department apparently believes students should appreciate the teachable moment that comes with being muscled by for-profit colleges.
If a few laws get broken along the way, well, live and learn.