The Feds Shut Down These Scam Colleges, But DeVos Won’t Help Ex-Students
In recent months, we’ve highlighted on this site some for-profit and career colleges whose predatory abuses against students should disqualify them from eligibility for federal student grants and loans, yet the Donald Trump-Betsy DeVos education department keeps sending them millions of our tax dollars each month; Ashford University, Florida Career College, American Intercontinental/Colorado Tech, and CollegeAmerica/Independence University are some of the school chains that come to mind.
But there’s another troubling collection of for-profit schools — ones that the Department of Education actually has dumped from the federal aid program for egregious behavior, yet DeVos is still refusing to provide their scammed ex-students with relief from federal loans. These schools are the focus of a new report from the non-profit legal group Student Defense and a letter released today by Democratic senators Dick Durbin (IL), Patty Murray (WA), Elizabeth Warren (MA), Sherrod Brown (OH), and Richard Blumenthal (CT).
Although a federal law empowers former students to ask the Department to have their loans discharged, Betsy DeVos, apparently convinced that it’s the students, not the for-profit colleges, who are the scam artists, has done everything in her power to prevent ripped-off students from getting free of their unfair debts. She gutted the Obama-era rule that would have helped students get loan relief. Her Department simply stopped processing tens of thousands of student loan relief applications, and when forced by student lawsuits to act, it began wholesale, arbitrary dismissals of the claims.
In addition to suggesting that former students would come to the Department with fake claims for loan forgiveness, DeVos has argued that taxpayers can’t afford full loan cancellations even where a school clearly misbehaved. She ignores that (1) students enrolled in these schools with the lure that the Department of Education (via its approved accrediting bodies) had essentially bestowed on them a Good Housekeeping seal; and (2) if the Department did end up granting loan relief repeatedly to students from a particular school, it might then be motivated to use its powers to recover the loan amounts from the offending schools and, ultimately, to drive those schools out of the federal aid program — thus saving taxpayers money in the long run and redirecting aid to schools that actually help students learn and build careers.
The new report and letter note that there are a good number of career schools that have closed in recent years after repeated allegations and lawsuits alleging predatory behavior. Overlapping with that group are five for-profit schools that the Department, in the final years of the Obama administration, expressly removed from the federal aid program because of egregious misconduct: Marinello School of Beauty, Medtech College, Charlotte School of Law, and Globe University/Minnesota School of Business, all of which have now shut down, and Computer Systems Institute, which has stayed in operation despite the loss of federal aid (through enrollment of a large volume of international students). Many of these same schools also have faced charges and findings of consumer protection protection violations by state attorneys general.
If the Department itself concluded that these schools’ misconduct barred them from the federal aid program, it should follow, logically and morally, that the students who attended those schools in the same period, and borrowed money with the Department’s consent, should get loan relief.
The senators rightly call DeVos’s failure to grant such relief “unconscionable, but not an accident.” They also are demanding review of DeVos’s failure to provide debt relief to former students of three predatory operations that have collapsed, leaving students locked out in the cold, in the Trump years without getting kicked out of the federal aid program — Vatterott College and multiple chains owned by Dream Center Education Holdings and Education Corporation of America.