Education Dept. Wants to Rescind Protections Against Predatory For-Profit Schools

News August 10, 2018 at 03:18 PM
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Education Secretary Betsy DeVos. (Photo: Bloomberg)

Education Secretary Betsy DeVos has taken another step to undo protections against predatory lending practices by for-profit colleges.

As expected, the DOE has proposed rescinding the Gainful Employment regulation, which requires for-profit schools to prepare students for a job in a recognized occupation or for a degree program at a nonprofit or public institution in order to participate in federal student loan programs.

DeVos, in a statement, said the current rule, enacted by the Obama administration, targets schools "simply by their tax status" and the department plans to update its College Scorecard or similar web-based tool to provide information about median debt and median earnings for all [our italics] higher-education programs that participate in federal student financial aid programs under Title IV of the Higher Education Act of 1965.

According to The Chronicle of Education, 98% of the education programs that failed the Gainful Employment rule in 2017 — one-tenth of all programs failed — were for-profit institutions.

The public will have 30 days to comment on the proposed regulation once it's published in the Federal Register.

This latest proposal from the Trump Education Department, like others before it, including plans to limit debt relief and loan forgiveness for student borrowers, was met with strong criticism.

New York State Attorney General Barbara Underwood, in a statement, said the DOE's plan to rescind the Gainful Employment rule "is a derogation of the department's duty to protect students from exploitation and taxpayers from the waste of federal funds." Underwood is part of a coalition of 18 attorneys general who filed suit against the department last year.

Bob Shireman, a former deputy undersecretary of education in the Obama administration, now a senior fellow at The Century Foundation, said in a statement that the latest DOE proposal, contrary to DeVos' argument, will hold "even the worst-performing for-profit colleges … to lower standards than public and nonprofit schools" because the latter "have strict financial controls to prevent the misuse of federal funds."

Shireman recounted DOE plans to limit debt relief and debt forgiveness for defrauded students and the reinstatement of a troubled accrediting agency, the Accrediting Council for Independent Colleges and Schools — it failed to meet more than half of 93 federal standards according to a DOE staff review — and concluded that the DOE "is operating more like a K Street lobbying firm than a federal agency."

The Gainful Employment rule is working, said  James Kvaal, president of the Institute for College Access & Success, in a statement. "Colleges have improved the value they offer students, and when they can't improve, students can find better alternatives. … Deleting the rule would be costly for both students and taxpayers."

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