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The Betsy DeVos Back to School To-Do List

By Alan Zibel


College students heading back to school should know that in Donald Trump’s America, the federal government definitely does not have their back.

Education Secretary Betsy DeVos, the infamous billionaire political donor with a Cayman Islands-chartered yacht and a palatial summer home on Lake Michigan, has been awfully busy lately.

DeVos and her aides spent their summer ticking off a long back-to-school list of ways to make life more difficult for America’s college students, while enriching the predatory corporations and political donors that have long been allies of DeVos.

In a new report, “University of Greed” [PDF], Public Citizen has analyzed DeVos’ efforts to undo sensible protections enacted under the Obama administration. DeVos wants to unravel efforts to prod student loan firms to improve how they assist struggling borrowers and deter for-profit education companies from saddling students with high debt burdens and weak job prospects.

Here are seven things DeVos has done to make the lives of America’s college students a lot less great:

  1. Failing to crack down on bad schools: Until President Trump took office, the U.S. Department of Education was targeting predatory for-profit college operators. Officials were successful in cutting off the flow of federal loan money to some of the worst abusers such as ITT Educational Services and Corinthian Colleges. Without the ability to feed off taxpayers, these schools had to shut down.  But DeVos picked a former for-profit college official to run the Education Department’s student loan enforcement office, established under President Obama to crack down on that same industry. Now, the department’s efforts to protect students from predatory schools are being gutted and investigations into several for-profit schools have been scotched.
  2. Hiring for-profit college profiteers to run the Education Department: DeVos has brought on several former for-profit college executives who are now overseeing the same companies where they once worked or represented. They include a former official at Bridgepoint Education Inc., a former lobbyist for the main trade group representing for-profit colleges, a former dean at for-profit DeVry University, a former consultant who did work for education investment firm Strada Education,  a lobbyist for Career Education Corp. and a corporate lawyer who also advised Career Education Corp.
  3. Preventing Relief of Defrauded Students: Student loan borrowers have long had the right to get their loans discharged if their schools engage in misconduct, but no formal process existed to file such claims. Under the Obama administration, the Education Department attempted to improve and formalize the debt-relief process. But DeVos blocked this streamlined process from going into effect. This summer, she proposed rules that would make it tough for students to get relief by requiring students to prove that schools displayed “a reckless disregard for the truth,” a far more difficult standard than under Obama. DeVos even mocked the Obama-era rules, claiming falsely that “all one had to do was raise his or her hands to be entitled to so-called free money.” Also on the DeVos chopping block: a  provision barring schools from forcing students into private arbitration tribunals or requiring students to waive their rights to pursue class-action lawsuits against their schools.
  4. Scaling Back Accountability for Poorly Performing Programs: Another DeVos target: Obama-era rules designed to weed out poor career-training programs at for-profit schools.  This “gainful employment” rule, which DeVos wants to scrap, injects some much-needed accountability by cutting off federal money to worthless career-training programs that fail to prepare students for the workforce. But DeVos wants to render these regulations toothless by allowing programs that consistently leave graduates with high levels of debt and low earnings to keep getting federal student grant and loan money.
  5. Rehabilitating a troubled for-profit college accreditor: Students don’t always get good grades. So why is it fair to go soft on colleges? The Trump administration has shown a troubling inclination to weaken independent accreditation bodies, which play a key role in ensuring schools are providing a high-quality education. Many higher education advocates are fearful that DeVos will go soft on the Accrediting Council for Independent Colleges and Schools, or ACICS, a particularly problematic accreditor that gave its stamp of approval to many institutions that ended up under federal or state investigation. While the Obama administration revoked ACICS’s recognition as an approved accreditor in late 2016, that decision is on hold after a court challenge.  Shortly thereafter, the Education Department reinstated ACICS despite the advice of career Education Department officials who detailed serious concerns about the accreditor. Meanwhile, a top Education Department official says DeVos wants allow accreditors to “tolerate some risk” — which doesn’t exactly inspire confidence that the interests of students will be protected.
  6. Scrapping Efforts to Rein in Predatory Student Debt Collectors: Student loan companies have long been the subject of complaints about poor treatment of borrowers. As a result, several states have set up licensing requirements for student loan servicers and protections for borrowers.  But rather than work with states, the Education Department has taken the position that federal law overrides sensible state consumer-protection measures. Even worse, the Trump administration also decided to no longer protect some student loan borrowers from being hit with hefty collection fees provided they enter into a repayment plan within two months of receiving a notice of default. And DeVos withdrew an Obama administration decision to evaluate student-loan debt collectors’ track record, including customer service standards, when deciding whether to award a new contract.
  7. Allowing Covert For-Profit Schools to Pose as Nonprofits: In recent years, many for-profit colleges have sought to convert to nonprofit status in an effort to escape federal oversight and shed the poor reputation of for-profit schools. Industry officials assert they are making this transition simply to improve their public image, which they claim is under an unfair attack. But converting to non-profit status also helps colleges escape regulatory requirements such as a federal law barring for-profit colleges from obtaining more than 90 percent of their revenue from Education Department student loans and grants. 

Betsy DeVos professes concern about burdening taxpayers with the cost of providing relief to defrauded students, but she seems unconcerned about preventing institutions from offering a shoddy education at high prices. Strangely enough, a report issued recently by Treasury Secretary Steven Mnuchin, indicates a much more clear-eyed understanding of these problems. The Treasury said it “is concerned about schools that do not provide student loan borrowers good value, often leading to indebtedness the borrower cannot repay in a reasonable time period.”

There is little sign, however, that these concerns expressed by her Trump administration colleagues trouble DeVos.  Instead, DeVos has sent a powerful signal to told scam artists, from the strip mall to Wall Street, that they’re back in business, siding with predatory companies and against hardworking people seeking better lives.

There is little to indicate that DeVos has much interest in higher education, knowledge about the field or ability to empathize with students who take on massive amounts of debt. An ardent advocate of unfettered competition in education, she has shown little concern for educational standards at the K-12 or collegiate level. DeVos is a natural ally for the for-profit college industry, with its large advertising budgets, promises of technological innovation and aggressive sales tactics designed to lure prospective students with false promises of a better future.