DeVos promotes student debt
Say this for Betsy DeVos: The secretary of education has shown an impressive commitment to rescuing her friends in the for-profit college business from pesky measures to rein in their predatory behavior. As pet projects go, it lacks the sulfurous originality of her emerging idea to let states use federal dollars to put guns in schools. But it is a scandal nonetheless.
Given the choice between protecting low-income students — and, by extension, U. S. taxpayers — and facilitating the buck-raking of a scandal-ridden industry, DeVos aggressively pursues Option B.
This summer has been a fertile period for the secretary. A couple of weeks back, her department formally introduced its plan to jettison gainful employment rules. These 2014 regulations require that, to receive federal student-aid dollars, for-profit colleges — along with certain programs at nonprofit and public institutions — must maintain a reasonable debt-to-income ratio among graduates.
If a program’s attendees typically rack up massive student debts and then cannot find decent jobs, the program is deemed a failure. Programs that fail in two out of three years become ineligible to receive the taxpayer-backed loans and grants with which so many students finance their schooling. The rules also require for-profit programs to make clear in their promotional materials whether they meet federal job-placement standards.
DeVos, delighting industry executives, promptly hit the pause button on these regulations upon assuming her post. Now the pending demise of the rules has been made official. DeVos contends that the system, put in place by President Barack Obama after bloody battles with the for-profit college industry and congressional Republicans, capriciously targets the sector. She has had far less to say about the industry’s eye-popping overrepresentation in fraud complaints.
A recent review of ‘‘ borrower defense claims’’ — requests for loan relief filed with the Education Department by students asserting they were defrauded or misled by their schools — found that almost 99 percent involved forprofit institutions.
In recent years, for-profit colleges have been swamped by lawsuits charging that they use deceptive marketing practices and high-pressure recruitment tactics to snooker students into taking on crippling debt in the pursuit of worthless degrees.
Dozens of programs have shut their doors of late rather than attempt to meet the new accountability standards. Consumer advocates see this as evidence that the common-sense regulations are working.
The secretary insists that she wants to root out bad actors as much as anyone. But if that were true, she probably wouldn’t have dismantled the department’s team tasked with investigating fraud at for-profit schools. She also might have opted not to end her department’s informationsharing arrangement with the Consumer Financial Protection Bureau, which is among the agencies that regulates this industry.
DeVos’ plan to ax the gainful employment rules was entered into the Federal Register on Aug. 14, officially starting the 30-day period open to public comment on the proposed changes.
Barring an unforeseen twist, executives in the forprofit education industry will soon be sleeping better, secure in the knowledge that even the worst are no longer at risk of being thrown off their taxpayer-backed gravy train, no matter how epically they fail their students.