January 8, 2018

DeVos Department Slamming Door on Defrauded Students

DeVos Department Slamming Door on Defrauded Students

This morning in Washington, Betsy DeVos’s Department of Education resumed the stakeholder sessions that are required by law in order for the Trump administration to repeal and replace Obama-era rules aimed at protecting students and taxpayers from abuses by predatory for-profit colleges. As pro-student negotiators no doubt will make clear over four days of meetings, the draft “borrower defense” regulations unveiled last week by the DeVos Department are a one-sided grant of power to the worst schools in the industry. This week’s negotiated rule-making sessions, therefore, seem to be an absolute charade.

The DeVos drafts set up a range of major obstacles to former students getting loan relief after they were defrauded or abused by their schools — effectively rendering null and void the 1994 law that provides for such relief. The proposed DeVos rules also would ratify the for-profit college industry’s disgraceful practice — which the Obama regulations had banned — of using forced arbitration clauses to deny students the right to sue for their injuries.

The December 21 announcement by the DeVos Department that many students already seeking redress after being scammed by predatory schools like Corinthian, ITT, and Kaplan would get only partial debt relief — based on a wholly inappropriate formula — was a further setback not only for those students but for the effort to curb bad behavior by colleges, the kind of behavior that has required repeated taxpayer bailouts. At this morning’s hearing, James Manning, a career official who serves as acting Under Secretary of Education, said that Secretary DeVos was forced to act because of the “haphazard” approach to debt relief pursued by the Obama administration. Manning also tried to push back on the perception, actually the reality, that a recent report by the Department’s Inspector General faulted the Trump administration for failing to grant any pending student debt relief claims.

While the regulatory process under Obama was a real tug of war, with Education Department and White House stances moving back and forth between positions urged by student advocates and industry lobbyists, under DeVos and Trump the process has moved inexorably toward the wish list of the worst industry actors, such as the awful Bridgepoint Education, one of whose lawyers, Linda Rawles, was picked by the DeVos Department to serve on the borrower defense stakeholder panel, among numerous other industry representatives.

The eloquent and reasoned presentations of negotiators representing students, veterans, consumers, and others thus far in these meetings are almost entirely ignored in the proposed rules from the Department, whose career staff, some of whom played similar roles in the Obama rule-making proceedings, sit and watch the panel meetings each day, some with withdrawn hostage faces.

Who exactly is drafting these rules is left unstated, but I think we can safely assume that some of them work for the for-profit college industry now, worked there before coming to the DeVos Department, or hope to cash out by working there when they leave. This is corrupt revolving door Washington at its worst, all under the president who promised voters he would drain the DC swamp. The same president also promised to fight for the forgotten man and woman, our veterans, and residents of “inner cities” — all constituencies that for-profit colleges have heavily abused. The Trump-DeVos higher education effort so far has made a complete mockery of those promises.

Watch the charade live here. In prior sessions of this rulemaking group, and the parallel meetings to undo the Obama “gainful employment” rule for colleges, for-profit college lobbyists and Department of Education officials objected to live streaming, but nevertheless my iPhone-enabled colleagues from Generation Progress persisted. Today, the Department’s Annmarie Weisman noted that the Department had determined, during the gainful employment sessions, that live streaming was appropriate, especially because Department lawyers believe the agency does not have the authority to regulate the public, and Weisman said that decision now applied to these borrower defense meetings as well. This legally-mandated, common-sense decision may have been the last victory for students and taxpayers in this proceeding, but we can still hope for a miracle.

This article also appears on HuffPost.