New documents have come to light, and it seems that Betsy DeVos’s mismanagement of the Department of Education (DOE) is worse than we thought. And that’s saying something, because this woman already made it harder to prosecute campus sex criminals, blatantly disregarded federal court orders, and used millions of federal dollars for her personal protection, even though her brother owns a security company. As it turns out, though, when it comes to the DOE, DeVos has been operating as a staff of one — even when that means disregarding input from teams of staffers.
NPR published a series of memos Wednesday that show the DOE’s “Borrower Defense Unit” unequivocally recommended that swindled students receive loan forgiveness from for-profit colleges. Despite the recommendations coming from career DOE staff, DeVos simply ignored them, and allowed the schools to continue their collection efforts against students victimized by fraud.
Okay, let’s back up a bit and put this into the absurd context it warrants.
The Borrower Defense Rule was adopted by the DOE in 2016 after the DeVry and Corinthian debacles; it allowed students to seek loan forgiveness from the federal government when a school violated state law. The concept is pretty obvious on its face: if a school defrauds a student (with predatory lending and failure to deliver an education), that student will no longer be obligated to pay back corresponding federal loans. The federal government can seek reimbursement of those unpaid loans directly from the offending school. This way, fraudster diploma mills will be the ones who have to pay for their misdeeds. This, way the federal government – and not individual students – will be the enforcer.
DeVos’s DOE has done a horrendous job of holding for-profit colleges accountable for their fraud. Schools have continued to collect loan payments from students, even when those students proved they’d been defrauded. In fact, DeVos was recently fined $100,000 for contempt of court, because of her “intentional flouting” the court’s order to stop collecting from students. For her failures, DeVos has consistently blamed the Obama administration, saying that borrower defense claims hadn’t been processed diligently or reviewed effectively. According to DeVos, her department would have done the right thing, but all that paperwork was just too confusing.
In reality, however, DOE staff was abundantly clear with DeVos that the Borrower Defense Rule required loan forgiveness. A memo obtained by NPR Wednesday dated Jan. 9, 2017, detailed:
Corinthian Colleges, Inc. (‘Corinthian’) consistently represented that all graduates obtained jobs after graduation or, relatedly, that its students were guaranteed employment after graduation. These representations were false and misleading. Accordingly, the Borrower Defense Unit recommends full relief for Corinthian borrower defense (BD) applicants.
Another memo of Jan. 10, 2017 discussed ITT Technical Institute students:
Hundreds of unprompted student statements confirm that lack of value of an ITT education, as ITT students time and again report that their education was sub-standard and that their degree or affiliation with the school was an impediment rather than an asset as they sought employment. Given this extensively well-documented, pervasive, and highly publicized misconduct, the Department has determined that the value of an ITT education — like Corinthian — is likely either negligible or non-existent. … Accordingly, it is appropriate for the Department to award eligible borrowers full relief.
Betsy isn’t budging though. She unveiled a new plan Tuesday that “ensures that taxpayers who did not go to college or who faithfully paid off their student loans do not shoulder student loan costs for those who didn’t suffer harm.” No mention of the Borrower Defense Rule’s provision authorizing the federal government to seek reimbursement directly from the offending fraudulent colleges.
DeVos’s commitment to help for-profit schools at the expense of students is nothing new. At her confirmation hearing, DeVos refused to commit to actively enforcing existing rules against waste, fraud, and abuse from for-profit colleges. Senator Elizabeth Warren (D-Mass.) skewered DeVos on this issue at DeVos’s confirmation hearing.
Shortly after DeVos ascended to her post at the DOE, Donald Trump appointed Julian Schmoke Jr. as the DOE’s chief enforcement officer for higher education, charging him with overseeing the enforcement unit that oversees misconduct by for-profit schools. That was weird, because before taking his DOE position, Schmoke actually worked for one of the worst offenders — DeVry University. DeVry eventually paid over $100 million to settle fraud cases with Federal Trade Commission, the Department of Education, and New York State for defrauding students during the very years Schmoke served as dean.
DeVos is slated to give testimony before a House oversight panel on Thursday, where she will answer questions about her mishandling student loans of over 29,000 borrowers who were students at now-defunct for-profit colleges.
[image via Mark Wilson/Getty Images]
This is an opinion piece. The views expressed in this article are those of just the author.