Monday, October 18, 2021

Feds move toward for-profit college revival


Significant steps are being taken at the US Education Department, led by Betsy DeVos, to breathe life into for-profit colleges that were suffering during the Obama administration due to regulations imposed on them that were designed to protect students, Politico reports.

(Ryan McKnight / Flickr Creative Commons)

Ms DeVos has, Politico reported, “moved to gut two major Obama-era regulations … that would have cut off funding to low-performing programs and made it easier for defrauded students to wipe out their loans” and “stopped approving new student-fraud claims brought against for-profit schools.”

The department apparently has a backlog of more than 65,000 applications from students who claim they were defrauded by low-quality for-profit colleges, and they’re seeking to have their loans forgiven. Some of these applications are from the period when Barack Obama was president.

“The for-profit college industry appears to have gotten everything they lobbied for and more,” the paper quoted Pauline Abernathy, executive vice president of the Institute for College Access and Success, as saying. Her organization has sought stronger consumer protections and tougher regulation of the schools.

For-profit colleges boomed during the Great Recession, when people who didn’t belong in college were sold on the idea that these schools and the pieces of paper they granted would bring new opportunities into their lives. Besides, they were told, the federal government will guarantee your loan, so it’s like you’re pre-approved.

So they enrolled. And enrolled. And built up a massive amount of debt. All on the basis of what appear to have been false claims of post-graduate success or money-earning potential.

As a result of what felt like fraud, they complained to their state attorneys general, who mostly went after the for-profit colleges.

“From Day One, Secretary DeVos and her advisers have chosen to side with predatory for-profit schools over the interests of students and taxpayers,” Politico quoted Massachusetts Attorney General Maura Healey as saying. “What they’ve done is actually make it easier for schools to cheat these students.”

Massachusetts and about 18 other states, all with Democratic attorneys general, are now suing Ms DeVos over her decision to suspend rules, US News & World Report said.

The department claims the rules are flawed and need to be fixed, which is why it has delayed their implementation and is now seeking to have them rewritten.

“That is why the Secretary decided it was time to take a step back and hit pause on these regulations … to make sure these rules achieve their purpose: helping harmed students,” a department spokesperson said in a statement.

Both Maryland and Illinois, along with California, Connecticut, Delaware, Hawaii, Iowa, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, are involved in the lawsuit, as is the District of Columbia.

Paul Katula
Paul Katula is the executive editor of the Voxitatis Research Foundation, which publishes this blog. For more information, see the About page.

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