Jul 25, 2018
In a development critics deemed a sign of the administration once again serving corporate interests, Trump's Education Department, headed by billionaire Betsy Devos, on Wednesday rolled out a proposal that would make it harder for students defrauded by for-profit colleges to be given debt relief.
Sen. Elizabeth Warren's (D-Mass.) response to the proposed changes to unimplemented Obama-era rules was unambiguous: "Revolting," she tweeted.
\u201cBetsy DeVos just proposed a \u2018policy\u2019 that will devastate students cheated by sham for-profit colleges, making it nearly impossible to have a fraudulent loan cancelled. @BetsyDeVosEd is supposed to work for students, not for-profit shareholders. Revolting. https://t.co/jMo3Kksy6u\u201d— Elizabeth Warren (@Elizabeth Warren) 1532536964
Under the new plan, which would take effect July 1, 2019, as the Associated Pressexplains,
students would be eligible for loan relief if they can prove their schools knowingly misled them with statements or actions that directly led them to take out loans or enroll at the school.
That would be a higher bar than rules finalized under Obama in 2016 after the collapse of two for-profit schools, Corinthian Colleges and ITT Technical Institute. Those rules allowed relief in a wider range of cases dealing with breach of contract.
Another key change that critics took aim at is that the new plan would help institutions evade responsibility by preventing students from banding together to sue the school, instead forcing them into arbitration agreements.
Given the potential impact on debt-burdened students, Warren was far from alone in decrying the proposal.
Massachusetts Attorney General Maura Healey, for example, argued that it would "let predatory schools cheat their students and enrich their executives."
\u201c#BREAKING Betsy DeVos rewrote the #BorrowerDefense rule to let predatory schools cheat their students and enrich their executives. No surprise.\n \nWe've fought for years to help defrauded students get the relief they deserve and we're not going to stop. #DefendStudents #4profit\u201d— Maura Healey (@Maura Healey) 1532533594
"The Trump administration's proposed rule is callous to the thousands of students harmed by an industry concerned only with its bottom line," said Julie Murray, an attorney with Public Citizen.
"Students must be able to hold predatory schools accountable in court for fraud and misrepresentation. Instead," Murray continued, "the proposed rule announced today would help predatory schools evade liability while cutting off federal loan relief to students who can ill afford it. Make no mistake about it: This proposed rule tells predatory schools that crime pays."
According to Ashley Harrington, policy counsel with the Center for Responsible Lending, the "proposed draft reads more like a roadmap for institutions seeking to abuse students and avoid accountability and transparency rather than a plan to protect students and taxpayers."
The 2016 Borrower Defense rule, she said, "was created to protect students and taxpayers from deceptive practices like that of ITT Tech and Corinthian Colleges that abruptly closed their doors after widespread abuses put them on the brink of bankruptcy and jeopardized the futures of thousands of students. This proposal shortchanges borrowers and will only inflate the growing $1.5 billion student loan debt crisis."
The top Democrat on the House Education and the Workforce Committee, Rep. Bobby Scott of Virginia, had harsh words for the proposal as well.
"Under the leadership of Secretary DeVos, the Trump administration is sending an alarming message: Schools can cheat [their] student borrowers and still reap the rewards of federal student aid," he said.
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.