September 13, 2018

Betsy DeVos Had A Plan to Prop Up For-Profit College Cronies. It’s Unraveling.

Betsy DeVos Had A Plan to Prop Up For-Profit College Cronies. It's Unraveling.

After a decade of revelations about for-profit colleges blatantly ripping off taxpayers and ruining students’ lives, it was remarkable that Trump Secretary of Education Betsy DeVos set out to dismantle all the Obama administration reforms aimed at holding such predatory schools accountable. Remarkable, but not surprising, given that Donald Trump formerly ran predatory, unlicensed Trump University, that billionaire DeVos has had money invested in for-profit education, and that the GOP Congress has been in the pockets of for-profit college donors for more than a decade.

But now DeVos’s plan to prop up bad for-profit schools seems to be unraveling.

Here are some recent developments:

— Late yesterday, a federal district judge in Washington declared illegal DeVos’s plan to delay the Obama borrower defense rule, which provided means for students deceived by government-approved colleges to have their federal student loans cancelled. Ruling in favor of state attorneys general and former students at the for-profit New England Institute of Art, Judge Randolph Moss held that DeVos’s postponement of the rule was “unlawful,” “procedurally invalid,” and “arbitrary and capricious.”

Judge Moss’s ruling is a huge win for students, and a serious rebuke of DeVos’s plans to gut the borrower rule. It also casts doubt on the anti-student revised borrower rule that DeVos proposed earlier this summer. The judge has called the parties back to court on Friday to discuss a remedy, and I hope he will impose safeguards and monitoring to ensure that the DeVos Department stops slow-rolling the process and short-changing students and actually starts granting debt relief under the Obama-era standards.

Veterans, students, and advocates in recent days have submitted hundreds of comments to the Department of Education criticizing, as unwarranted and unlawful, the DeVos proposals to replace the Obama borrower defense rule and to eliminate the Obama gainful employment rule, a regulation that would impose penalties on career college programs that consistently leave students with overwhelming debt. They also appeared last week at a Department of Education hearing in DC to denounce plans by DeVos to trash many of the remaining safeguards on predatory college abuses.

— Late last week, the largest accreditor of for-profit schools, ACCSC, issued a scathing letter placing all eleven of the campuses of the CollegeAmerica/Stevens-Henager College chain on probation, citing deceptive recruiting, weak academic quality, poor graduation rates, and, strikingly, efforts to blame Native American culture for the poor results at one campus.

This isn’t the first indication that the chain is a poor performer; the schools have faced multiple lawsuits and law enforcement actions, including a fraud case recently taken to trial by the Republican attorney general of Colorado. But DeVos has indicated she might come to the chain’s rescue, reconsidering the Obama administration’s emphatic decision to reject the chain’s phony conversion to non-profit status.

The chain’s CEO, Eric Juhlin, charged that ACCSC’s decision “may have been issued in reaction to external or other inappropriate influences.” But we don’t think ACCSC’s mind has been altered by attendance at ecstasy raves. Instead, it seems ACCSC head Michale McComis is determined to start standing up for student results, rather than being pressured by predatory schools and their lawyers.

— The giant for-profit Art Institutes chain, whose troubling conversion to non-profit status we recently chronicled, is collapsing, after, as we first reported, the schools (which have had good instructors but a series of bad owners) misrepresented their accreditation status, failed to comply with federal regulations, and ramped up recruiting abuses.

— Meanwhile, another predatory chain, Education Corp. of America, had its Virginia College rejected by the accreditor ACCET and this week announced it will close 26 campuses around the country.

— Another accreditor, the Higher Learning Commission, this week is making a follow-up visit to evaluate the new Purdue University Global, whose shiny ads now blanket the TV airwaves. The ubiquitous commercials can’t hide the fact that the school is not really Purdue but instead is the online former Kaplan University, which is still run in many key respects by a for-profit company, Graham Holdings, with a disgraceful record of deceiving and shortchanging students.

Last week Purdue Global, after criticism from the American Association of University Professors, was forced to back off a policy that required instructors to sign agreements surrendering their intellectual property rights over their work and prohibiting them from blowing the whistle on bad behavior inside company. The AAUP and the Century Foundation’s Bob Shireman and Yan Cao have also attacked a Purdue Global policy prohibiting students from taking disputes with the school to court. HLC should stand up for teachers and students and call off this whole deceptive mess.

— Senators late last month demanded that DeVos answer questions about her top higher education aide, Diane Auer Jones, who, as we had reported, participated in an effort to tell the Art Institutes chain to misrepresent its accreditation status. The senators already had written to DeVos about conflicts of interest related to Jones, who previously worked at predatory Career Education Corp. and consulted for CollegeAmerica in its Colorado trial. They’ve also asked questions about other top DeVos aides who previously worked for bad-acting for-profit schools.

— Also late last week, the Federal Trade Commission obtained an agreement from shady lead generation operators to hand over the, and other internet domains, which they used to trick people into believing their operations were associated with the U.S. military and then sold their contact information to for-profit college recruiters. Taking a cue from two FTC commissioners, consumer advocates and members of Congress are now demanding that the agency disclose the names of the schools that bought the student info from these sleazy operations. We already have a pretty good idea who they are — Kaplan University, Virginia College, schools operated by Career Education Corp., Ashford University, the University of Phoenix, and other bad actors.

— DeVos ended her Department’s cooperation on student loans issues with the Consumer Financial Protection Bureau, an agency created by Obama in the wake of the 2008 financial crisis. But after Obama holdover Rich Cordray left the CFPB, new agency acting head Mick Mulvaney aligned himself with DeVos and against students. Seth Frotman, the CFPB’s top student loan official, resigned last month, with a blistering letter charging that under Mulvaney, the CFPB “has turned its back on young people and their financial futures” and “abandoned the very consumers it is tasked by Congress with protecting.” “Instead,” Frotman wrote to Mulvaney, “you have used the Bureau to serve the wishes of the most powerful financial companies in America.” Yesterday on CNBC, confronted with Frotman’s charges, Mulvaney said, “I never met the gentleman. Don’t know who he is.” He never met his senior student loan official? Great job.

Betsy DeVos, along with Mick Mulvaney and Donald Trump, still hold key levers of power for higher education policy. Taxpayers and especially students will suffer greatly as a result. But eventually a policy so blatantly corrupt and so bad for the American people is going to fall of its own weight, pushed along by the efforts of judges, legislators, independent federal agencies, state overseers, accreditors, advocates, and students. That’s happening, right now.