Predatory “for-profit colleges and programs” have come under a great deal of fire in recent years. Students of all ages, seeking job re-training or new skills, often found themselves with high debt and few job prospects after attending for-profit institutions. And you may recall that Trump University, a for-profit institution, settled a number of lawsuits from former students who felt they’d been cheated for $25 million.
One set of rules that Secretary DeVos wants to delay and rewrite are called the gainful employment regulations. Under these rules, the Education Department compares how much the typical student borrows versus how much they earn after graduation at for-profit colleges and any non-degree employment certificate programs. A “failing” collegeor program is one where students can’t successfully find well-paying jobs, yet face mountains of debt. In one example cited, a student left a for-profit college with $45,000 of debt and a job that paid $21,000 before rent, food and taxes. It’s a comparison of how much you spend to how much you earn. If a program fails in any two out of three years, it becomes ineligible for federal financial aid. Federal financial aid provides up to 90% of the revenue for many of these for-profit programs and without such aid, they are likely to close. The gainful employment regulations had yet to be implemented because of aggressive appeals by for-profit institutions. DeVos has now extended the original deadline for filing appeals and plans to completely rewrite the rules.
Just 11 days before Trump’s inauguration, the Obama Administration released a study of some 500 failing for-profit institutions that had NOT appealed their status. Over 300 of them had already closed down, despite no legal obligation to do so at this point. The gainful employment test seems to be a sufficient way to identify programs that even for-profit colleges don’t think are worth saving.
DeVos has also delayed the borrower defense to repayment rules. These rules prevent forcing students to sign agreements that waive their right to sue, give defrauded students a quicker path to having their loans erased, and hold schools, not taxpayers, responsible for tuition and other costs. Attorneys general from 18 states and the District of Columbia are suing Secretary DeVos over her actions.
Call to Action
Call the Department of Education at 1-800-872-5327. Press “3” and, after a short recording, someone should answer and take your comments. Tell that person to please tell Secretary DeVos:
- You oppose the delaying and rewriting of the rules that protect students in for-profit institutions.
- Specifically, she should implement and not delay the borrower defense to repayment rules and the gainful employment regulations. These rules protect both students in these institutions and taxpayer monies that go to student loans.
- Secretary DeVos should please focus her efforts on strengthening public education and supporting student debt relief!