December 20, 2017

New DeVos Loan Forgiveness Plan: Another Assault on Students and Gift to Predatory Schools

New DeVos Loan Forgiveness Plan: Another Assault on Students and Gift to Predatory Schools

It took Betsy DeVos nearly a year to take any action on the nearly 100,000 applications by former students who assert that they were deceived and abused by predatory for-profit colleges like Corinthian, ITT, and Kaplan. But the new process announced today appears to be a step backwards, a new attack on students, and a gift to the most abusive predatory schools.

In addition to denying thousands of claims today, DeVos outlined new standards that rip off injured students by limiting their debt relief through weighing of their income, often even if they have only a low-wage, part-time job, and even if that job has nothing to do with the training they received at the offending college. It’s somewhat unclear from Department statements and media reports exactly how the comparisons will be made, but it appears the new approach would punish those students who have overcome the obstacles of a deceptive, subpar education and found a way to support themselves. Or it could penalize the financially worst-off graduates of a career education program at a failed school if others in that program did better.

Worse, to limit student debt relief, the Department is using income data derived from the Obama gainful employment rule — the same data that the Department, at the urging of for-profit college lobbyists, appears ready to abandon when measuring the performance of schools. In other words, data that shows career college students tend to earn low incomes is used by DeVos when it helps her limit debt relief for students, but is trashed by DeVos when it puts at risk the profits of predatory for-profit colleges.

But what the Department has announced is even worse than that because:

1. Even full cancellation of federal loans would not come close to making students whole from their experience of attending a dishonest school, because of all the out-of-pocket expenditures, grants, scholarships, earned benefits, expensive private loans, time and effort that the student expended and that would not be recovered; in light of those non-recoverable costs for students, the new stingy standard is even more harsh.

2. The relief standards are not nearly high enough to deter bad colleges from staying in the federal student aid program and, more importantly, they’re not high enough to deter the Department from keeping bad colleges in the program. Thus the new DeVos policy of limiting loan relief for defrauded students is in fact a permissive approach to waste, fraud and abuse that will, over the long term, not save taxpayers money but instead will cost billions.

Students have rightly taken action today to file a class action lawsuit against DeVos for denying them the relief to which they are fully entitled.

DeVos was supposed to make her first appearance as Secretary today before the House Education and the Workforce Committee. But that appearance — her only scheduled appearance before the committee for 2017 — was inexplicably cancelled.  The committee chairwoman, Virginia Foxx — a relentless supporter of the for-profit college industry — claims as her committee motto “Keeping Washington Accountable.” Hardly.

This article also appears on Huffington Post