The big surprise at the end of 2017 is that U.S. Secretary of Education Betsy DeVos has been arguably worse for higher education than she has been for K-12, which is not what most experts predicted when she took the job.
While protestors have dogged DeVos across the country to attack her support of “school choice” and call her out for neglecting the civil rights of K-12 students, she has been far more effective at gutting regulations protecting the rights of college students and college student loan borrowers.
Although Congress has generally not been receptive to DeVos’s proposal for a nationwide school voucher program for K-12, and there are few signs of her building strong relationships with governors or state education leaders, she and her department seem to be working in lock-step with Beltway Republicans who favor the college loan and for-profit college industries. And she and her boss President Trump have stocked her department with operatives from the-profit college industry.
Her success at advancing the interests of big money and corruption in higher education was most recently made apparent when she announced that her department would provide only partial payments to some of the nearly 100,000 students who say they’ve been defrauded by scam for-profit colleges and universities. Of the 20,000 student claims her department is processing, only 12,900 students are getting partial approvals and 8,600 are being turned away altogether.
Further, DeVos is introducing what she calls an “improved process” that rewrites the rules on student loans in a way that favors scam schools over student borrowers in any future resolutions over college loans connected to fraudulent schools.
These developments would seem to indicate that DeVos is much less a zealous advocate for a cause she personally espouses than she is a surrogate for the Republican party and its donors and lobbyists.
Early Signs of an Assault
DeVos came to her job with a long history of advocacy in the K-12 sector, particularly in promoting charter schools and vouchers and other forms of “school choice.” During her stormy confirmation hearing, Senate Democrats focused almost all of their questions on her plans for K-12 education policy, and her most widely publicized gaffes – about grizzly bears and gun -free school zones, the Individuals with Disabilities Education Act, school vouchers, and the conflict over measuring school growth vs. proficiency – were related to K-12.
But a question from Massachusetts Senator Elizabeth Warren foretold the trouble DeVos would bring to higher education policy. When the senator asked, “How do you plan to protect taxpayer dollars from waste, fraud and abuse by colleges that take in millions of dollars in federal student aid?” the closest DeVos could get to answering the question was to declare she would “work diligently” and “commit to ensuring that institutions which receive federal funds are actually serving their students well.”
In retrospect, a more honest answer from DeVos would have been, “I will pull back what little protections against fraud and abuse taxpayers and college students have.”
Signs that DeVos would do more damage to college front than to K-12 emerged six months into her tenure when seasoned education journalists at Education Week noticed DeVos and her department were hard at work watering down two Obama-era regulations: One called “gainful employment” that held higher ed institutions, primarily technical and career colleges, accountable for their marketing claims to provide degree programs that actually led to jobs; and the other called “borrower defense” that provides a process for students to have their loans forgiven when they’ve been ripped off by college lenders and scam schools.
As the EdWeek reporters explain, DeVos had more leverage over higher education policy than K-12 because of the federal student loan program which provides more money to higher ed than the states provide. Also, revisions to federal K-12 laws that occurred toward the end of the Obama administration, called the Every Student Succeeds Act, reduced the education secretary’s influence on the K-12 sector and returned more authority to the states.
“The list of higher education actions under the new secretary is not pretty,” reported the Center for American Progress in July. “If the work done by DeVos and company in the first 144 days of her service all comes to fruition, then millions of borrowers will get worse customer service on loan servicing; loans will become less generous and grants will shrink; students will not be protected from low-value programs; and defrauded borrowers will not get relief.”
Among DeVos’s transgressions CAP noted are a withdrawal of Obama-era policy requirements to consider borrower-focused protections and customer service guarantees when selecting new college loan service providers, proposals to cut $143 billion from federal student college loans, and the restoration of large collection fees loan servicers can charge to borrowers.
For-Profits Get What They Want
By August, it was apparent the biggest benefactors of DeVo’s actions on higher education would be 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.