How Betsy DeVos wants to defang rules for-profit colleges and reduce relief for borrowers

How Betsy DeVos wants to defang rules for-profit colleges and reduce relief for borrowers

October 14, 2019 0 By Stanley Isaacs


WILLIAM BRANGHAM: She doesn’t necessarily
attract as much national attention as other members of the president’s Cabinet, but Education
Secretary Betsy DeVos has been busy. Throughout the summer, her department has
been taking a very different approach to for-profit colleges compared to its predecessor. That sector of higher education has been under
especially harsh scrutiny in recent years. Those changes are the focus of our Making
the Grade segment, with Amna Nawaz tonight, and part of our periodic look at the education
secretary’s agenda. AMNA NAWAZ: For many years, the for-profit
college sector boomed, eventually reaching enrollment of two million nationwide. But complaints mounted about some players
in that industry, and the Obama administration cracks down on them, closing down two major
for-profit chains. The administration also imposed new regulations,
including some that provide more forgiveness for student debt. Education Secretary Betsy DeVos has announced
some major rollbacks on that front. Anya Kamenetz covers higher education closely
for NPR, and joins me now. Anya, welcome to the “NewsHour.” I want to ask you about a couple specific
changes that have been proposed by the education secretary. What about student debt forgiveness? Now, previously, under the Obama administration,
if you attended a for-profit school, and that school was shut down or penalized for defrauding
students, how easy was it to have your loans forgiven? And what’s different now? ANYA KAMENETZ, NPR: So the rule introduced
under Obama was called borrower defense to repayment. And, basically, they were clarifying how a
student who had gone to one of these colleges who had been defrauded could get their money
back. They would have to — they wouldn’t automatically
get their loans forgiven, but they’d have to go through this process. And what’s happened under DeVos is, there
are still tens of thousands of claims pending from people who went to ITT Technical Institute
and Corinthian Colleges, two colleges that were shut down, as well as others. And DeVos has said that she’s going to grant
only partial relief in many circumstances. And, in fact, there’s a new report from the
AP that has shown that, in the first few months of this program, under DeVos, they have only
— forgiven fully only 1,000 people. And that’s out of tens of thousands that have
petitioned. So they are trying to match up your income
with the amount of money that you’re going to get back, which is a principle that seems
to be not relevant to some student advocates. They say, look, if your college defrauded
you, it doesn’t really matter how you’re doing financially now. The point is that you didn’t get what you
were promised. AMNA NAWAZ: Previously, also, you were able
to seek relief as part of a group. Is that right? Is that different now? ANYA KAMENETZ: Right. So, borrower defense to repayment was originally
meant to be something that students could achieve in batches. And the — the claims could be processed in
batches by the Education Department. And DeVos has also instituted this idea of
going case by case. Now, you have no right to representation as
an individual student who’s been defrauded. So you have people, many of whom are very
poor, veterans, working parents, and they’re trying to petition, and they have high burdens
of proof to meet, as well as this personal information about their incomes. AMNA NAWAZ: Now, OK, there was another rule
about gainful employment. This goes back to regulations established
in 2014. There was some accountability added to the
system, right? They tracked and basically published then
data that said, OK, if students — how many of your students are unable to pay back the
loans that they took out to attend your school? And then people could publicly see those numbers. Schools with bad numbers are penalized. How would this administration change that
rule? ANYA KAMENETZ: Gainful employment is a rule
that was specifically targeted at the for-profit college industry. And, as you mentioned, this rule wouldn’t
only publish schools that did a bad job kind of putting their students into gainful employment,
but it would eventually penalize those colleges with losing access to federal student aid. What’s happened under DeVos is, they are proposing
now to take away the teeth out of that. So they’re still going to publish the information,
including performance by program of schools in federal — the federal College Scorecard,
but what they’re not going to do, they say, is have any consequences for colleges necessarily
that are doing such a poor job of placing students in gainful employment after they
leave. AMNA NAWAZ: Anya, we’re talking about changes
proposed by the Department of Education. But I want to ask you about another federal
agency, the Consumer Financial Protection Bureau. There was a man there who was basically the
student loan watchdog, who resigned basically in protest a couple of weeks ago. Is that related to any of these changes at
all? ANYA KAMENETZ: It is, because the student
loan industry is a major, major part of the overall consumer finance industry. And it is overseen in some sense by the Education
Department. But, as we have seen, there have been many
people from the student loan industry, as well as the for-profit college industry, that
have been installed into the Education Department under Betsy DeVos. And even if that weren’t true, the Education
Department essentially collects revenue from the student loan business. And so the point made by Seth Frotman, and
others who are consumer advocates is that there really needs to be another regulatory
boss on the job, that the Consumer Financial Protection agency — the Consumer Financial
Protection Bureau has fulfilled a very important role in overseeing a major amount of student
loan debts, to $1.5 trillion. And without the true commitment to helping
students and being — to having students’ backs, this person, in resigning, really felt
like they weren’t really being able to do their job. AMNA NAWAZ: Anya, very quickly, in a few seconds,
what do you think is the overall impact on students as a result of these changes? ANYA KAMENETZ: Well, it really is caveat emptor
more than ever before for people that are thinking about signing up for college. And for-profit colleges, they are still losing
enrollments, but it’s really incumbent upon each individual to do their own research before
signing up for any program. AMNA NAWAZ: Anya Kamenetz of NPR, thank you
very much. ANYA KAMENETZ: Thank you.