WASHINGTON — The Department of Education, led by Republican über-donor and grizzly-bear alarmist Betsy DeVos, has unveiled a new proposal that would make it dramatically harder for tens of thousands of students who attended scammy for-profit colleges to receive debt relief.
On Wednesday morning, the department released its plan to weaken the so-called “borrower defense” rule. Borrower defense was enacted in the waning days of the Obama administration as a way for students to seek help if they had taken on debt to attend a college or university — typically a for-profit institution — that was later shut down for fraud. Under Obama, students of shuttered schools like ITT Tech and Corinthian College could apply for relief from the Education Department, which would either help individuals get their money back or transfer their credits to another higher-ed institution.
After Trump’s election and DeVos’ arrival as education secretary, the for-profit college industry set out to neuter borrower defense as well as a handful of other policies put in place by the previous administration. The industry had inside help: DeVos is a vocal supporter of privatizing various aspects of American education, and she has hired a slew of for-profit industry alums to work in her agency, including a former executive at a for-profit college who was tasked with working on the department’s watered-down version of borrower defense.
The new rule — which would apply to students seeking loans after July 1st, 2019 — makes it “next to impossible,” in the analysis of Century Foundation senior fellow Bob Shireman, for deceived students to get relief for the debt they took on to attend these shady schools. It could potentially require students to provide reams of evidence in the form of emails, phone call notes and other communications that prove the institution had knowingly misled them — documents students might not have access to in the normal course of going to college. (The Obama version said students were eligible only if they could show they’d attended a school that was later accused of wrongdoing.) The new measure suggests limiting the students eligible to apply for relief to only those who have defaulted on their loans, excluding those in debt but still making their payments. And it proposes further limiting the window of time when a student can apply for relief.
If enacted, DeVos’ proposal would eliminate more than 85 percent of the relief that the Obama version would have given to affected students, according to Bryce McKibben, an education policy adviser to Sen. Patty Murray (D-WA), ranking member on the Health, Education and Labor Policy committee.
“This is a clear sign that students cannot rely on Secretary DeVos, and that she will continue to give predatory for-profit colleges and corporations a free pass when they mislead, cheat and defraud students,” Sen. Murray (D-WA) said in a statement.
In the wording of the proposal, the Education Department shifts much of the blame away from predatory colleges and onto the students themselves who chose those schools. “Postsecondary students are adults who can be reasonably expected to make informed decisions and who must take personal accountability for the decisions they make,” the proposal says.
As of May 1st, 2018, there were nearly 100,000 borrower defense applications already pending, according to figures released by Sen. Dick Durbin (D-IL). The total amount of loan interest for those students added up to roughly $369 million.
The public has 30 days to weigh in on the new version of the borrower defense rule. California Attorney General Xavier Becerra, a Democrat, tweeted that he would “vigorously oppose” it. Massachusetts Attorney General Maura Healey, a Democrat, echoed that: “We’ve fought for years to help students get the relief they deserve and we’re not going to stop.”
DeVos’ attempt to weaken the borrower defense protection is the latest effort by the Education Department under President Trump to weaken existing protections for students and adopt a position that is far more friendly to industry, especially the for-profit higher-education business. Last fall, DeVos hired Julian Schmoke Jr., a former dean at the for-profit DeVry University, to lead a team that cracks down on fraud in higher ed. (DeVry had recently paid $100 million to settle a federal lawsuit brought by the Federal Trade Commission that alleged misleading marketing tactics.)
Many of the reactions to Schmoke’s hiring were incredulous. Sen. Chris Murphy (D-CT) tweeted that Schmoke’s hiring was “akin to nominating influenza to be the Surgeon General.”
It shouldn’t come as a surprise that the Trump administration would gut protections for students and come to the aid of colleges with questionable reputations. Trump is, after all, is a man who counts Jerry Falwell Jr. — the leader of the billion-dollar online education juggernaut Liberty University — as a close friend and “spiritual adviser.” And of course, Trump’s own foray into higher-ed ended in a $25 million settlement to students who accused him of fraud.