Betsy DeVos Postpones Rule Protecting Students From Fraud

Education Secretary Betsy DeVos has announced that the department will be rewriting Obama-era rules that protect students from predatory schools.

On Wednesday, United States Secretary of Education Betsy DeVos made an announcement that left education advocates at a loss for words.

Now, many people are warning that President Barack Obama-era rules designed to protect students from predatory for-profit colleges are effectively dead under President Donald Trump.

In her official announcement, DeVos said that while “fraud committed by a school” is unacceptable, the former administration's rules “missed an opportunity to get it right.” In order to have the last piece of regulation rewritten, the secretary said that the enforcement has to be postponed.

The two rules associated with this piece of news are known as Gainful Employment, which has already been in effect and won't be modified, and the Borrower Defense rule, which should go into effect on July 1. 

Borrower Defense was put in place to give students the chance to cancel their student debt if the institution hasn't kept its promise to help students follow a viable career path. Now, this regulation will be postponed until committees rewrite the regulation, The Nation reports.

While DeVos said colleges have shown concern that the ruling shows “lack of meaningful due process protections for institutions,” Pauline Abernathy, the executive vice president for the nonprofit organization Institute for College Access and Success (TICAS), said that the postponement represents a victory for “for-profit colleges and Wall Street but is terrible news for students, taxpayers, and anyone concerned about rising student debt.”

According to The Nation, the Gainful Employment rule will remain in effect throughout the entire rewriting process. Under this rule, if the graduate’s loan payment is the equivalent to 8 percent or more of his or her total earnings, or about 20 percent, then the school failed to provide the student with “gainful employment.”

Since most for-profit colleges rely on federal student loans, schools that continue to break this rule are restricted from receiving taxpayer-backed funds.

But with the Borrower Defense rule now on hold, students whose schools were caught breaking the Gainful Employment regulations aren't able to get their money back.

Still, DeVos promised that about 16,000 students will be allowed to have their loans canceled under the now-postponed Borrower Defense rule, but no other applications will be accepted until the rule is rewritten.

To Alexis Goldstein, senior policy analyst for Americans for Financial Reform, this decision is “a slap in the face to defrauded Americans” that places “the interests of wealthy for-profit college executives ahead of students striving for a better life.”

Due to the widespread outrage demonstrated by these and other advocates, Massachusetts Attorney General Maura Healey is now saying she will sue DeVos' agency, claiming that the postponement of the 2016 rule is a “betrayal of students and families across the country.”

Even if this lawsuit doesn't materialize, the pressure is such that DeVos will be forced to prove she isn't putting for-profit schools before students while rewriting the regulations. Otherwise, scrutiny may prompt more officials across the country to join Healey against the Trump administration.

Banner/thumbnail credit: Reuters 

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