Betsy DeVos Takes Another Swipe At Defrauded Students Seeking Loan Forgiveness
Two and a half weeks after four state Attorney Generals sued the U.S. Department of Education and its Secretary Betsy DeVos for failing to forgive student loans acquired at fraudulent for-profit colleges, the Trump Administration plans to make it more difficult for students to receive loan forgiveness.
On January 3, Politico presented a draft proposal it obtained that revealed how the Department of Education would make it more legally difficult for borrowers to receive loan forgiveness. According to Politico, the Department of Education would raise the borrowers’ standard of evidence to “clear and convincing evidence” from the Obama administration’s “preponderance of the evidence.”
It also proposes limiting borrowers’ filing time from six years to three. In addition, Politico notes, “[The proposal] would eliminate a category of claims based on a college breaching its contract with a student. It would keep a path for loan forgiveness based on a state or federal court judgment against a college — but appears to narrow it by specifying the judgment needs to have been obtained by the borrower.”
Hence, state Attorney Generals would be out of the loop.
This week a three-day “special committee meeting” will discuss the proposal. DeVos organized this special committee herself.
This proposal and its possible impact on student loan forgiveness, and higher education itself, drowned in the week’s news of adolescent taunts of nuclear destruction and the Trump-Bannon bromance death. This meeting and the committee’s possible decision must not go unnoticed.
The reality that universities, even credible and accredited non-profit ones, have taken on a corporate mindset in the past twenty-five years is a reality that Trump and DeVos have ran with, in their slow unraveling of Obama-era regulations. Though having no experience in education or establishing her own bait-and-switch educational opportunity, DeVos and her family, like Trump, are no stranger to fraud allegations and government investigations.
And this administration’s actions continue to reflect that.
Partners In Fraud
Donald Trump’s own fraudulent and predatory for-profit Trump University (later called Trump Institute, since it wasn’t a true legal university) encountered fraud claims and lawsuits.
While Trump champions himself as one who refuses to settle lawsuits, he folded after his Presidential election with those filed toward Trump University. Now that he was President, twenty-five million dollars would be paid out to defrauded Trump University students. This settlement resulted from two federal class action lawsuits in San Diego and one by New York Attorney General Eric T. Schneiderman.
A July 2017 Rantt News story accounted how the insidiousness of Amway, a still-thriving pyramid scheme owned by the DeVos family, crept across the northern border and resulted in the Canadian government filing fraud charges that it later dropped after DeVos’s husband pleaded guilty.
Rant also addressed the Federal Trade Commission investigated Amway over forty years ago.
As with Trump and his now-defunct “university,” for-profit universities make wild claims, offer nothing tangible except exorbitant tuition, and prey on the vulnerable and driven, working to make a go in life — the very people the GOP champions as pulling themselves up by their bootstraps.
Since Trump took office last year, he has made it his goal to roll back Obama’s presidential legacy, and his mission hasn’t stopped with the Obama administration’s regulations on for-profit colleges. In addition to now proposing to raise the bar for borrowers, DeVos has brought in the former dean of DeVry University, another for-profit school that has faced fraud allegations. She also halted new student-fraud claims and made it easier for for-profit colleges to keep receiving federal funding.
For Trump and DeVos, this mindset of for-profit universities seems par for the course.
But it is not par for the course for Illinois Attorney General Lisa Madigan, who is one of the four state Attorney Generals who filed the December 2017 lawsuit.
In her July 2017 Crain’s Chicago Business op-ed “Why I’m Suing Betsy DeVos,” Madigan wrote how the Trump administration protects corporations instead of defrauded students.
“The latest example is Secretary DeVos’s recent decision that will in effect rescind the Borrower Defense to Repayment Rule,” Madigan points out in her op-ed. “This rule ensures that schools — not taxpayers — pay for fraudulent practices and bars schools that engage in fraud from receiving federal loan money. It also provides important protections for borrowers such as automatic loan forgiveness when a for-profit school closes before students can complete their degrees.”
A week before Christmas, DeVos decided to only offer partial student loan forgiveness for some Corinthian College students.
Though unethical and unaccredited for-profit universities are the antithesis of accredited non-profit universities, the message given by Trump and DeVos is that corporate culture in higher education is acceptable.
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A Professor’s Take On The Trump-Era
A tenured associate professor of English at the University of Wisconsin System concurs. Because tenure protections have been weakened at the University of Wisconsin, this professor requested anonymity in an email interview.
This professor sees how the Department of Education’s rollback of student loan forgiveness for students who attended for-profit schools could trickle down into other Obama-era provisions.
“[T]he Obama administration’s move to mitigate the cost of an education gained and then used in public service was a welcome change. We are already looking at a projected teacher shortage here in Wisconsin, and this decision by the Trump administration has the potential to exacerbate that.”
The professor said that after she graduated with her MFA in creative writing, the corporatization of higher education was beginning. She also noted that today it is not unusual for universities to have 70% of its faculty be populated by adjuncts whose employment is not guaranteed and who do not receive benefits.
The pay per class for adjuncts at some institutions can be as low as $1,700, which is broken up every two weeks during the length of an academic term. Unemployment is often not paid during breaks because of “reasonable assurance,” which states that if an adjunct was offered a class the following semester and has taught at the institution for a number of semesters, their employment for the next term is guaranteed.
Though in January of last year the U.S. Labor Department presented new guidelines for adjuncts that would have made it easier for them to collect unemployment, under the Trump administration that may be at risk as well.
While now a tenured professor in the University of Wisconsin System, the job security and benefits she once believed she would have had with pursuing a career in academia no longer remains. Cutbacks in the Wisconsin state budget that began under Governor Jim Doyle and continued under Governor Scott Walker along with frozen tuition and an ongoing divestment have dramatically impacted the University of Wisconsin System.
“[I]n the UW Colleges it has negatively affected our ability to recruit and retain tenure-track faculty because our pay is about 20% below the national average of an institution of our size. [After earning my MFA in Creative Writing], I took the first full-time job I was offered, in an investment banking firm, making more money than I ever had. My salary in 2017 dollars would have been about $70,000. I now make $20,000 less than that as a tenured professor.”
The Department of Education’s decision on its draft proposal needs to be watched as closely as the FCC’s decision to overrule Net Neutrality and the GOP tax bill. If defrauded for-profit university students cannot obtain complete student loan forgiveness, it sends a message to higher education overall.