The Fallout of the DeVos Delay

By Erin Castillo

U.S. Secretary of Education is unlawfully delaying efforts to protect students from unfair practices in the for-profit college industry. That’s what the attorneys general from 18 states and the District of Columbia are alleging in their recent lawsuit. The outcome of the suit could have significant implications for Colorado students.

The Obama administration created the regulations in question to rein in the exploitation of student loan borrowers, but Secretary Betsy DeVos argues several schools would be burdened by the rules, ones she believes were written too loosely.

The regulations included:

  1. Borrower defense to repayment: This allows some borrowers to be eligible for federal student loan debt forgiveness if the school they attended engaged in misleading or unlawful behavior.
  2. Gainful employment: To ensure students get what they paid for, for-profit schools would be required to abide by specific debt-to-earnings ratios in order to receive federal student financial aid.

These regulations hold for-profit institutions accountable, something students desperately need given the landscape. In the past, deceptive marketing tactics at some for-profit schools harmed students’ potential by churning out graduates with half-decent job prospects.

Beyond putting successful grads into the workforce, schools need to meet the gainful employment rule so their funding isn’t cut back. For low-income students, decreased federal support may push them further into debt or out of school entirely.

The attorneys general suing DeVos claim she violated the Administrative Procedures Act (APA) by not providing enough notice before July 1 for public comment. The Department of Education (DOE) delayed the regulations and announced it will issue new ones surrounding the issue without any further insight from stakeholders.

According to the lawsuit, the DOE decision also violates the APA by not acknowledging the “requisite legal standard for a stay of agency regulations,” not basing the delay on pending litigation, and by failing to provide “reasoned analysis” spelling out the change of stance.

“It is important that we take action where we see activity by the federal government, Secretary DeVos and the Department of Education, that is unsustainable, unfair and illegal,” said Massachusetts Attorney General Maura Healey, who is leading the lawsuit, told the Washington Post.

The DOE is now saying institutions will have until July 1, 2018 to comply with the gainful employment debt-to-earnings ratio requirements. The DOE will appoint separate rulemaking committees which will renegotiate the gainful employment and borrower defense rules. The DOE also wants more clarity and strictness within the rules, and says they will work to protect taxpayers and students in the event of financially vulnerable colleges collapsing.

But waiting another year threatens students. A study by the Center for Responsible Lending (CRL) shows why Colorado students need the Obama-era regulations in place now. According to the study, students attending Colorado’s four-year, for-profit colleges have a 26 percent graduation rate (53 percent of non-profit private institution students walk away with a degree). For-profit students also have an average student loan default rate which is more than double that of public and private institution students.

For Colorado and beyond, the effects of the delay will continue. Those who will bear the brunt will be low-income students as well as racial and ethnic minorities, making it more difficult to get a leg up in society. More than ever, postsecondary education is imperative; by 2020, 74 percent of all Colorado jobs will require some higher level schooling.

Instead of turning a blind eye to the predatory practices of for-profit institutions, the DOE and Secretary DeVos should advance our country’s investment in education by enforcing rules which help Americans create a better life for themselves. This is why Colorado Attorney General Cynthia Coffman should join the 19 other AGs in opposition of DeVos’ delay.

Students and their families deserve maximum transparency on costs, completion rates, employment, and earnings income, as well as the student debt levels they’ll walk away with so they can make the best decision when it comes to their education. Their futures — and those of all Coloradans — depend on making this possible.

JOIN US

DONATE

 

BELL POLICY HOT SPOTS

OVERTIME

AGING ROADMAP