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'Revolting': Betsy DeVos Unveils Proposal to Make It Harder for Students Defrauded by Predatory Schools to Get Loan Relief

Plan slammed as looking "more like a roadmap for institutions seeking to abuse students and avoid accountability and transparency rather than a plan to protect students and taxpayers."

Education Secretary Betsy DeVos testifies during a Senate Appropriations Subcommittee hearing on Capitol Hill, June 5, 2018 in Washington, DC.

Education Secretary Betsy DeVos testifies during a Senate Appropriations Subcommittee hearing on Capitol Hill, June 5, 2018 in Washington, DC.  (Photo: Mark Wilson/Getty Images)

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.

Under the new plan, which would take effect July 1, 2019, as the Associated Press explains,

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."

"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.

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