Betsy DeVos Continues Family Tradition Of Defrauding The Public
On Thursday July 6, eighteen states and the District of Columbia filed a lawsuit against Secretary of State Betsy DeVos for undue process regarding two rules enacted during the Clinton administration protecting students who were swindled by for-profit colleges and universities much like Trump University.
The lawsuit claims that Secretary DeVos illegally suspended a rule that would have expanded the already established Borrower Defense to Repayment and Gainful Employment rules. The rules were first introduced and established by the Clinton administration but modified to be made stricter by the Obama administration in October 2016. The Secretary instructed her staff to not enforce the rules set to go into play on July 1, 2017, and instead asked that they appoint a committee to revise the rules. One of the lead prosecutors in the case, Attorney General Eric Schneiderman of New York said:
“These rules served as critical protections against predatory for-profit schools. Yet, the Trump administration continues to work against New York’s students — instead allying themselves with unscrupulous actors in the higher education industry.”
Of course, DeVos and her husband’s family are no strangers to scams disguised as a profitable venture.
A DeVos Family Tradition
In 1959, Amway (short for “American Way”), founded by Richard DeVos (Betsy’s father-in-law), opened it’s doors to sell home, health, and beauty products on a multi-level marketing platform. Based in Betsy’s home state of Michigan and still owned by the Devos family, it is one of the largest private businesses in the United States raking in billions of dollars a year in profit.
From 1970–1979 the Federal Trade Commission investigated Amway for their pyramid scheme practices. The company now serves as a textbook example of how multi-level marketing/pyramid scheme “companies” operate, how to spot them, and the steps to take in order to report them. Though still in business, the insidious nature of Amway is no secret. The corporate culture is one of cult-like devotion, burrowing into the psyche of their most devoted affiliates.
Amway hasn’t been under scrutiny from just U.S. authorities for their scheming and scamming. In 1982, Canadian officials filed criminal fraud charges against the company citing $28 million in unpaid customs fees in addition to forged receipts covering the unpaid dues. The next year, Betsy’s husband Richard DeVos and other Amway executives plead guilty, after which the Canadian government dropped the charges.
The general structure and offerings of companies like Amway are not so far off from the practices implemented by for-profit schools. A business model which preys on the uneducated, desperate, and vulnerable is not a business — calling it anything else is a fallacy. Continuing to allow these practices to remain in our culture and making it easier for them to profit from ignorance is a travesty. Failing to ensure the protection of those victimized by faulty systems is antithetical to what our highest public offices should otherwise stand for.
Why The Suspension Of These Protections Matters
The Borrower’s Defense Rules serve as a sort of bailout for students who were victims of institutions that committed fraud, were fiscally irresponsible, violated state consumer protection laws, and collapsed due to mismanagement. In years previous, as with most bailouts, the taxpayers foot the bill for bailing out these students. The Obama administration’s amendments to the rule put the onus on the schools to have the collateral as a fallback. A textbook case for why these rules are necessary are the 2016 folds of both ITT Institute and Corinthians College. The cost for breaking like a cheap table? $247 million in student loan defaults paid for by the taxpayer.
A telling detail for why the DeVos team would choose to suspend these rules lies in the deregulation teams the Trump administration is appointing to a myriad of departments. The Education Department’s deregulation team includes a member who is specifically linked to for-profit colleges. The conflicts of interest do not stop in the White House.
Nineteen attorney generals attached to the lawsuit agree that the case against DeVos is simple: The department violated federal law by axing the rule without due process.
“With no notice, with no opportunity for comment … the DeVos team is trying to cancel this rule… It is important that we take action where we see activity by the federal government, Secretary DeVos and the Department of Education, that is unsustainable, unfair and illegal.” — Massachusetts Attorney General Maura Healey, the lead prosecutor on the case against DeVos
Senator Elizabeth Warren (D-MA) defended Attorney General Healey’s suit -saying, “Betsy DeVos is bending over backwards to make it easier for fly-by-night schools to cheat students and bury them in mountains of debt, Secretary DeVos might not like it, but her job is to serve students — and we will make sure she does.”
Department of Education press secretary Liz Hill responded to the suit by calling it, “ideologically driven,” defending the decision to revise the rules by saying that they, “ suffer from substantive and procedural flaws.” DeVos’ team is citing a counter-suit from California against the rule as her reason for overthrowing the rules and, “starting from scratch.” There is no reason to believe otherwise that DeVos’ main interest is to protect the corporations and institutions behind these higher education scams.
Her undue process in attempting to repeal the Obama rules speaks to a disregard for what is actually helpful to students and the taxpayer in favor of simply being against something because it crossed Obama’s desk. Secretary DeVos believes that anyone who makes the mistake of being swindled deserves what’s coming to them, even if the entity doing the swindling broke the law in the process.
Just as Amway has no problem with taking people’s money and running, Secretary DeVos will allow the same to happen with America’s shameful for-profit schools.
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