DeVos Makes it Easier for Bad Career Programs to Scam Students: What Our Partners and Allies Think

On August 10, 2018, the U.S. Department of Education and Education Secretary Betsy DeVos continued it ceaseless efforts to make it as easy as possible for bad colleges and career programs to take advantage of students by proposing to eliminate the Gainful Employment rule.

Finalized in 2014, the Gainful Employment rule cuts off federal financial aid at nondegree, career training programs at public, nonprofit, and for-profit institutions where graduates take on too much debt compared with their earnings. This was meant to hold those predatory and expensive schools – many in the for-profit sector – accountable for deceptive marketing and for recruiting students who would graduate with huge debts and few job prospects.

The rule identified many bad programs with high debt burdens, forced many programs to improve, and gave students more information to pick schools with better job placement rates after graduation. But the new draft that DeVos released today removes the threat of losing federal financial aid for bad schools and programs. It also eliminates the reporting and disclosure requirements for schools. Many experts and student advocates agree: the new proposal is a complete repeal of the rule, a boon to the for-profit college sector, and will be costly for both students and taxpayers. Even the Department’s own cost analysis for repealing the rule put the estimated cost at $5.3 billion to taxpayers.

Consumer and students’ rights advocates have reacted strongly to this move by the Department. Here is what we and our partners have to say:

Full statements accessible via hyperlinks, where available.

Center for American Progress Senior Director for Postsecondary Education, Ben Miller

“The draft rule released today cements the proof that past calls of so-called gainful employment for all were really efforts to achieve accountability for none. This action comes on the heels of blatant and repeated efforts from this administration to ignore its legal duty to implement the existing gainful employment regulation. Now that former executives from for-profit colleges have had a chance to rewrite the gainful employment regulation, the net effect ensures lousy programs will evade accountability and continue to receive billions in federal financial aid—even as their graduates suffer.”

Center for Responsible Lending Policy Counsel Ashley Harrington

“For-profit colleges aggressively market their education programs and, in many cases, fail to provide a useful education to the students they enroll. These institutions target low-income students, students of color, and military servicemembers, who disproportionately bear the costs of for-profits’ high costs and poor outcomes. Because of DeVos’ cozy relationship with this industry, low-performing programs will continue to operate and ensnare hopeful students into assuming large debt with little hope of repayment. This will cost students and taxpayers almost $5 billion over the next decade, profits that will land almost exclusively in the hands of the for-profit college sector.”

Consumer Action Director of National Priorities, Linda Sherry

“Another day, another chance for the Department of Education to roll back safeguards aimed at protecting students and taxpayers and bolster the billion-dollar for-profit school industry…This new proposal will provide billions of taxpayer dollars to under-performing colleges, students will be left with mountains of debt and worthless degrees, and taxpayers will foot the bill.”

Consumers Union Senior Attorney, Suzanne Martindale 

“The Department of Education has turned its back on student borrowers harmed by predatory for-profit schools and on any efforts to hold them accountable for providing a quality education and spending taxpayer funds responsibly…The Department has a duty to evaluate career programs for quality, and help students make better choices when seeking to improve their futures through higher education. Instead of abandoning these rules, the Department should be working to ensure that students and taxpayers are not subsidizing schools that do little more than put students in debt.”

Hildreth Institute Director, Dr. Bahar Akman Imboden

“Education Secretary Betsy DeVos’ decision to repeal the gainful employment rule is unjustifiable. Our students need protection from low-quality schools that have built their business model on the availability of student loans. Gainful employment rules were designed to take away for profit schools’ eligibility to offer student loans if their graduates could not earn enough money to pay off their student debt. Now, without these regulations, these predatory for-profit corporations will, once again, provide a low-quality education and pocket students’ money while saddling them with loans that they can’t repay.”

National Consumer Law Center Attorney, Abby Shafroth

“The gainful employment rule is a basic, commonsense safeguard designed to protect students and taxpayers by ensuring that federal dollars do not flow to schools that consistently fail to deliver sufficient value to students to enable them to afford their student loans. The rule protects millions of Americans enrolled in career training programs and provides incentives for schools to reduce their costs and increase their value…The Department’s proposal would demolish safeguards that prevent low-value schools from taking advantage of the federal aid system to line their pockets with taxpayer dollars at the expense of students working to build better lives for their families.”

The Century Foundation Senior Fellow and Former-Undersecretary of Education, Robert Shireman

“With this action, Betsy DeVos is saying to the for-profit colleges: go ahead, provide worthless degrees, we’ll keep the taxpayer dollars flowing…Absent the gainful employment rules, even the worst-performing for-profit colleges will be held to lower standards than public and nonprofit schools, which have strict financial controls to prevent the misuse of federal funds.”

The Education Trust President and CEO, John B. King Jr.

“By withdrawing the gainful employment regulations, the Trump administration is once again choosing the interests of executives and shareholders of predatory for-profit higher education institutions over protecting students and taxpayers. It is outrageous and irresponsible that as a result of this administration’s actions, programs that leave students – especially students from low-income backgrounds, students of color, and veterans – considerably worse off than when they enrolled will continue to receive federal dollars.”

The Institute for College Access & Success President, James Kvaal

“Opposed by [a for-profit college] industry with deep pockets and billions of taxpayer dollars to lose, the rule has been subjected to nearly a decade of close scrutiny, analysis and debate, including nearly 200,000 public comments, and survived multiple court challenges. In fact, there is stronger evidence than ever that the rule is working. Colleges have improved the value they offer students, and when they can’t improve, students can find better alternatives…The Administration put its cards on the table today, and it’s clear that it has little interest in protecting students or taxpayers from excessive, unaffordable student debts.”

Veterans Education Success President, Carrie Wofford

“Betsy DeVos’s ruling today is a big gift to the lowest quality bad actor college programs that are notorious for deceiving veterans out of their hard-earned GI Bill…We are gravely disappointed that Betsy DeVos and the former for-profit college executives surrounding her in leadership positions at the Education Department failed to listen to any of the testimony they received from national veterans’ organizations or from recommendations that received 100% support at the Department’s Negotiated Rulemaking process earlier this year.”

Young Invincibles Government Affairs Director, Reid Setzer

“It’s been clear from day one that the Department of Education under Secretary DeVos favors predatory for-profit colleges over the students they’re supposed to serve, but this proposed repeal is the most blatant example of all. With several schools already closed due to deliberate misrepresentations and outright fraud, this rule helped ensure that students were using their limited federal financial aid on quality, affordable career education programs. Instead, Secretary DeVos and the Trump Administration have gutted it, empowering the schools who already take advantage of far too many students, especially low-income students and student veterans.”


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