The Trump Administration’s Lousy Gifts to Grads
6 cruel “gifts” the White House has bestowed upon students during its first months in office
This post originally appeared on usnews.com on May 25th, 2017 | By: Ben Miller
On Saturday, President Donald Trump delivered a commencement address before thousands of graduates at Liberty University in Virginia. While the speech provided those in caps and gowns with words of encouragement, when it comes to actions during the first 100 days, the only well wishes this administration is sending are to companies and schools that take advantage of students.
Here are six “gifts” the Trump administration has given current, former and future students during its first few months in office.
- Removed protections for 32 million federal loan borrowers. Around 70 percent of students graduating with bachelor’s degrees this spring will have taken out federal student loans to pay for their education. These students depend on a set of private contractors known as student loan servicers to successfully navigate their repayment options and avoid defaulting on their debts. Unfortunately, too often borrowers fail to get the service they need. Navient, the nation’s largest student loan company, even said in a court filing,“There is no expectation that the servicer will act in the interest of the consumer.”The Obama administration tried to improve student loan servicing by holding a new competition that would establish promises for borrowers to receive good customer service and hold servicers accountable for poor past behavior. The proposal would have revolutionized, modernized and improved the way nearly 32 million people get assistance from the Department of Education.Not surprisingly, some of the loan servicing companies did not like being held to higher standards and facing more requirements, so they challenged the new proposal. And on April 11, the Trump administration sided with servicers over students. Education Secretary Betsy DeVos pulled the policy memos guiding new servicing standards and promised to not look as hard at negative past performance by servicers.
- Left 68,000+ borrowers in loan-forgiveness limbo.Last year, the Department of Education started forgiving loans for thousands of borrowers who had been duped by their schools into borrowing for lousy programs. By January, the department had forgiven over $558 million worth of loans for 28,000 borrowers. But the Obama administration did not have time to process the tens of thousands of pending claims before leaving office – so it sent emails to 23,000 of the 68,000 borrowers with pending claims telling them they were approved for forgiveness.Despite this promised forgiveness, the Trump administration appears to have done nothing for these borrowers. The administration will not say if any of the 23,000 with approved forgiveness claims received relief . And the leader of the team working through the other 45,000 pending applications has left the agency.
- Tried to cut financial aid by $5 billion. Trump’s “skinny budget” – released in March – wanted to put the federal aid programs on a starvation diet. The budget would cut $3.9 billion from the Pell Grant program’s rainy day fund, decimate spending for students to hold jobs while studying and end a $700 million program that provides supplemental grant aid to low-income students. Fortunately,Congress rejected much of the first round of cuts.
- Delayed warning students about lousy programs. Certain career training programs were supposed to start warning prospective students this spring that their high levels of debt compared to earnings might result in losing access to federal financial aid. Instead of giving students much-needed transparency, the Trump administration decided to delay these warnings for most affected programs.
- Filled the swamp. When looking for expert knowledge on higher education policy, the Trump administration turned to two individuals with experience working for organizations with a history of working against students. One is Robert Eitel, a former lawyer at Bridgepoint University, a publicly traded for-profit education company that is facing a federal investigation around misstating how much of its revenue comes from the Department of Education. Bridgepoint University also paid $24 million last year to settle a lawsuit over private loans it offered students. Not only did the Trump administration decide that a lawyer from a company with a litany of legal problems was the best person to run higher education policy, it did not even make him quit his job at first. Eitel worked for months at the Department of Education while on a leave of absence from Bridgepoint.The initial Trump team also included Taylor Hansen, a former lobbyist for the trade association that represents for-profit colleges. Hansen would have been ineligible to work in the government under past stricter rules on employing lobbyists. Instead, he stayed at the Department of Education until just after Trump’s final gift to students..
- Allowed debt collectors to make more money off students. Defaulting on a student loan can do all kinds of damage to students. It can ruin credit, making it harder to get a home, job or car. It can lead to wage garnishment or the seizure of tax refunds. Because of this, federal law includes a one-time fresh start that allows borrowers to rehabilitate their loans and erase the record of default. Some borrowers who try to take advantage of this option and fix their loans quickly, however, were getting charged a massive fee equal to 16 percent of their loan balance to get back in good standing. The Obama administration stopped this practice. The Trump administration undid it in early March.The biggest beneficiary of this change? A company run by Taylor Hansen’s father, which sued the Obama administration .
Fortunately, there is one good thing Donald Trump did for students in his first few months – pay out $25 million to refund students who attended his sham college, Trump University. But for the rest of America’s students, they can now thank this administration for a greater risk of getting preyed upon by predatory college programs, having to take on more debt due to financial aid cuts and no oversight of the companies that service their loans.
Posted on 17 May 2017
|The Center for American Progress is an independent nonpartisan policy institute that is dedicated to improving the lives of all Americans, through bold, progressive ideas, as well as strong leadership and concerted action. Our aim is not just to change the conversation, but to change the country.