August 10, 2018

Kushner Teaming With For-Profit College Backers As Trump-DeVos Assault on Students Mounts

Kushner Teaming With For-Profit College Backers As Trump-DeVos Assault on Students Mounts

The trade publication Inside Higher Ed today reports that Trump senior adviser and son-in-law Jared Kushner convened a meeting last week at the White House to discuss innovation in higher education. Reviewing the reported attendee list, and considering that the meeting comes on top of three Department of Education announcements attacking Obama-era higher ed regulations, it appears that the Trump White House and Betsy DeVos’s eduction department are intensifying their assault on the interests of students and taxpayers. They’re doing so by accelerating the handover of policy to predatory actors in the for-profit college industry, whose bad behavior has ruined the lives of veterans, single moms, and others across the country.

This morning the DeVos Department formally announced its plan to trash the Obama gainful employment rule, which would have penalized federally-funded career and for-profit college programs that consistently leave graduates with overwhelming debt. Last week, the Department declared its intention to revisit rules that govern the accreditation process and that seek to ensure that online programs provide serious instruction. And two weeks ago, the Department published a proposed regulation that would thoroughly destroy the Obama borrower defense rule, which was aimed at providing some student loan relief to people ripped off by predatory colleges that have been getting billions of taxpayer dollars each year.

At the center of all these anti-reforms, it appears, is DeVos aide Diane Auer Jones, who has not been nominated or confirmed by the Senate, but is holding, in a long-term acting capacity, both of the top higher education jobs in the Department.

Before the Trump administration, Jones lobbied and consulted for some of the worst for-profit college entities, including Career Education Corp., CollegeAmerica, and the trade group CECU.

And now we know that Jones was in Kushner’s meeting, convened under the auspices of his Office of American Innovation.

Just as concerning, also in the room where it happened was a representative of Strada Education Network, described by Inside Higher Ed as “a nonprofit that uses philanthropic investments to identify improved pathways from education to employment.” In reality, as we reported last year, Strada, formed out of the predatory student loan agency USA Funds, seems to exist mostly to pay big salaries to top executives; to invest, with private equity firms, in for-profit education; and to make “charitable” grants that often seem to align with the organization’s investment goals.

Worse, Strada is headed by William Hansen, who, as George W. Bush’s deputy education secretary, oversaw policy changes that ignited egregious abuses in the for-profit college industry, and who now sits on the board of the same predatory Career Education Corp. where Diane Jones was senior vice president from 2010 to 2015.

Illinois-based Career Education Corp., whose schools have included American InterContinental University, Colorado Technical University, and Sanford-Brown, was getting as much as $1.9 billion annually in federal student aid dollars during in the peak years of the for-profit college era. In recent years the company has been under investigation for deceptive practices by the Federal Trade Commission, the Securities and Exchange Commission, and the attorneys general of 21 states and the District of Columbia. 

In 2013, CEC agreed to pay $10.25 million in fines and restitution to students over the New York attorney general’s charges that CEC significantly inflated its job placement rates in communicating with students, accreditors, and government officials. In 2010, CEC agreed to pay $40 million to settle a class action lawsuit brought by students who said its San Francisco-based California Culinary Academy had misled them by claiming that 97 percent of graduates were hired for culinary jobs. In February 2017, CEC agreed to pay $10 million back to U.S. taxpayers to settle a False Claims Act lawsuit alleging that its American Continental University violated the legal ban on paying sales commissions to college recruiters, failed to verify students’ proof of graduation, and lied to its accreditor.

The situation is, in fact, even swampier. Another senior DeVos higher education aide, James Manning, previously served as a consultant to Hansen’s operation. A third top DeVos higher ed adviser at the Department, Robert Eitel, previously worked at CEC. And Hansen’s son worked briefly at the Department at the start of the Trump administration after being a lobbyist for CECU, and appears to have tried while inside to get to work on modifying the regulations he had been paid to oppose when lobbying.

DeVos herself entered office reporting investments in for-profit education.

The White House reliance on these revolving door advocates for predatory colleges to guide its higher ed efforts means either that a sincere Jared is being played for a sucker or, more likely, that this process is one more example of the Trump administration cynically molding its policies to the greed of America’s worst predatory corporations, to the detriment of hard-working Americans. Drain the swamp indeed.