For-Profits Get What They Want Pt III

By August 2017, it is apparent the biggest benefactors of DeVo’s actions on higher education are for-profit colleges.

This industry saw big setbacks under Obama administration crackdowns on their business practices. A large number of the schools faced steep fines for misrepresenting job placement data and altering grades and attendance records. Many institutions had to close operations due to financial pressures resulting from the fines and downturns in their stock values.

But as Politico reported, DeVos not only took aim at the “gainful employment” rules; she also delayed a rule that would have barred for-profit colleges from “requiring students to resolve complaints through arbitration, rather than a court or class-action lawsuit.” Her department cut enforcement efforts on for-profits and showed favoritism for the industry in deciding individual cases when students believed they had been defrauded. And she abandoned “a federal task force designed to crack down on abuses at for-profit colleges and share information across investigative agencies.”

By September, DeVos was openly contending that regulations that held for-profit colleges accountable for defrauding students, including the borrower defense and gainful employment requirements, were basically tantamount to giving student “free money.”

Stocking Up on For-Profit Operatives

Meanwhile, the Trump administration slowly went about stocking DeVos’s department with personnel sympathetic to the for-profit college loan industry.

Two early hires were Robert S. Eitel, an attorney for an operator of for-profit colleges, and Taylor Hansen, a former lobbyist for a for-profit college industry organization. Hansen left his position under a storm of controversy after a very short stint, but Eitel remains as senior counselor.

Another hire was Julian Schmoke Jr. to lead the department’s efforts to police fraud in higher education. Schmoke was a former dean at DeVry University, a large for-profit college that had previously been fined by the Obama administration and forced to repay students for its misleading advertisements.

Another hire was Carlos G. Muniz to be the department’s top attorney who helps decide its primary legal actions. Muniz helped defend the Florida attorney general’s decision to sit out legal action against Trump University.

Trump University, an enterprise started by Trump to woo individuals into real estate courses that were never accredited, didn’t lead to an actual degree, and rarely provided a pathway to any kinds of a job, was hit by lawsuits in California and New York representing thousands of former students who believed they had been defrauded of thousands of dollars by the program. Trump contended the suits were baseless, but he eventually settled for $25 million. Because Trump U was based in Florida, the state’s attorney general had an obligation to join the lawsuit, but didn’t, and Muniz defended that decision.

Muniz also did “consulting or legal work on behalf of a for-profit college,” according to Politico.

Wait, It Gets Worse

More recent developments at the end of 2017 continue the concerning track record DeVos is building on higher education.

As David Dayen reports for New Republic, new regulatory guidelines DeVos is pushing for victims of for-profit colleges, who have asked to have their student loans discharged due to fraudulent practices, will provide just a portion of relief based on the students’ current income. In other words, to paraphrase Dayen, the more adept students are at recovering from being ripped off by a bogus college degree program, the less money they will get in restitution.

The draft regulatory rewrite is currently open for comment from “stakeholders,” David Halperin reports for HuffPo, but he deems the rule-making sessions “an absolute charade” and notes the intentions of DeVos and her department’s efforts are clearly to “set up a range of major obstacles to former students getting loan relief after they were defrauded or abused by their schools.”

At the same time DeVos is muscling through regulatory rewrites that favor for-profit colleges and the predatory student loan industry, Republicans in Congress is revising the Higher Education Act that would codify much of what DeVos is accomplishing through regulation into federal low.

As I’ve reported, “If the Higher Education Act rewrite the Republican House proposes resembles what eventually passes, it will remake higher education along very narrow perceived needs of the ‘work force,’ limit financial supports for students, and give advantages to for-profit private providers.” These are all policy guidelines DeVos has supported.

So far, DeVos has called the draft rewrite of HEA in the House a “starting point” and has said “she hadn’t had an opportunity to look at the details of the bill.” But the actions of her department seem to strongly align with the changes in student financial aid, federal loan and repayment options, and regulatory pull back the House is calling for.

Gotten DeVos All Wrong

So the track record for DeVos in 2017, at least as it pertains to higher ed, seems to indicate that many have gotten the narrative about her wrong.

During her confirmation and throughout her tenure, she has been repeatedly cast as a crusader for a special cause. She was also portrayed as a powerful mover and shaker in the Republican party due to the outsized influence she had through her family’s substantial donations to political campaigns.

As secretary of education, though, her actions related to higher education tell a somewhat different story. Rather than being a crusader, her policies have reflected those of the Republican establishment. And rather than being someone who can buy influence, she’s been more like a tool of the lobbyists and industry operatives who populate her department.

Leave a comment

Your email address will not be published. Required fields are marked *