Secretary of Education Betsy DeVos could have had an easy victory. Instead she got sued.
All she and her Department of Education had to do was allow regulations finalized by the Obama administration in November 2016 to take effect as planned on July 1. Instead, she announced in mid-June the rules would be delayed and rewritten. A few weeks later, 18 states and the District of Columbia sued her.
The set of regulations, called the Borrower Defense Rule, is “to protect student borrowers against misleading and predatory practices by postsecondary institutions and clarify a process for loan forgiveness in cases of institutional misconduct,” according to a press release.
Many students who need this protection attend for-profit colleges, operated, as the term suggests, to enrich the owners; so tuition supports profits as well as educational goals.
Imagine a student who decides to attend one of these institutions and qualifies for federal aid. That aid then goes to the college, which gets in trouble with its state or even eventually closes. The school already has the money; the student has unpaid loans and, often, no degree.
As of October 2016, the DOE had received 82,000 borrower defense claims in the aftermath of the closing of Corinthian Colleges, a for-profit postsecondary education company that contributed to the need for these regulations. About 2,000 Kentucky students were defrauded and eligible for debt relief.
Though not part of this lawsuit, Kentucky has fought with for-profit colleges before. In 2015, then Kentucky Attorney General Jack Conway sued for-profit Daymar College, located in Owensboro. A $12.4 million settlement allowed debt forgiveness and cash payment for more than 12,000 students.
The borrower-defense rules seek to fix unfair situations by making it simpler for those students to get their loans forgiven.
The Obama administration settled on the rules after two years of negotiations and public comment. DeVos decided to delay them after five months in office, with no public comment. The absence of public comment is one of the reasons she was sued.
The attorneys general of the 18 states and Washington, D.C., led by Massachusetts Attorney General Maura Healey, accused DeVos and her department of violating federal law in their complaint, filed July 6 in the U.S. District Court in D.C.
Healey charged that DeVos is siding with for-profit schools. If DeVos really is on their side, we have to wonder why.
Why does she support institutions too-often focused on profits rather than excellent education? Why side with schools that typically pay educators less than other colleges? Why support colleges that aggressively recruit students, particularly low-income students and veterans, to fill their coffers with federal loans and grants? Why help colleges with reputations so bad that their degrees often hurt rather than help graduates’ resumes?
DeVos said these rules would create a “muddled process that’s unfair to students and schools, and puts the taxpayers on the hook for significant costs.” But things are already unfair for everyone but these schools. And taxpayers already are on the hook — it’s their money that ends up in the colleges’ bank accounts.
Rather than leaving the burden of unpaid loans on the students, implementing these rules would help the students through loan forgiveness while putting pressure on unreliable schools.
When she announced the delay, DeVos said the previous rulemaking “missed an opportunity to get it right.”
Let’s hope she and her department avoid costly litigation and quickly decide how best to give relief to deserving students.