Attorneys General Push DeVos for For-Profit College & Student Loan Regulation
Attorneys General from 17 states and the District of Columbia sent a letter to the new Secretary of Education Betsy DeVos and congressional leaders in support of Obama-era federal protections for college students. The Trump Administration and Republican-led congressional education committees have signaled that they’re ready to reverse rules and regulations preventing for-profit colleges from gouging students.
In their letter, the AGs noted that, over the past decade, student debt has risen dramatically, from $450 billion to $1.4 trillion. They wrote, “Of the top 25 schools where students hold the most student loan debt, over half were for-profit schools.” When students take out loans, they’re typically federal loans administered by the Department of Education. The AGs argued that close to 200 for-profit schools get most of their income from federal sources – and that doesn’t count money from the GI Bill.
The letter outlined deceptive and abusive practices perpetuated by many for-profit schools prosecuted by the states, including promises of jobs and careers, exaggerating job placement statistics, false claims that credits would transfer. “In short, the entire for-profit education system was failing students and taxpayers,” the letter said.
They Attorneys General went on to note that three Obama-era rules and policies are critical to protecting consumers and taxpayers. One measures graduates’ debt-to-income ratio and is meant to ensure that graduates of schools can repay their loans. Another provides federal oversight to accreditation bodies that give schools their seal of approval. The third, which is supposed to go into effect on July 1, empowers students to assert a defense to repayment of their federal student loans.
In the face of an anticipated move to rescind the Borrower Defense to Repayment Rule before it takes effect, the AGs wrote, “A basic sense of justice requires that the borrower defense to repayment rules be allowed to take effect. Millions of students paid tens of thousands of dollars each in federal student loan money to for-profit schools and received worthless degrees in return. Federal student loan debt is non-dischargeable in bankruptcy. These students cannot be left without a clear recourse. The new borrower defense to repayment regulations provide that recourse and should be allowed to take effect.”
The letter closes by revealing that the Attorneys General hear from desperate for-profit college students everyday, and asserting that enabling for-profit schools to have free access to federal student loan money without accountability and oversight would be a mistake.