Betsy DeVos Faces Another Lawsuit Over For-Profit College Loans

Even though a court ordered the Department of Education to discharge — otherwise known as forgive — student loans taken out by people who attended for-profit colleges that were later shuttered, the agency has been slow to comply.

And now, Secretary of Education Betsy DeVos faces yet another lawsuit over the situation, highlighting her historically cozy relationship with these institutions.

The controversy in this case surrounds the Borrower Defense to Repayment Rule, instituted under the Obama administration. Students who attended schools that misled them or engaged in other forms of misconduct before closing down are eligible for loan forgiveness. If implemented as designed, the policy could wipe out $250 million in debt for 106,000 students who took out loans to finance educations that never materialized or didn’t come with the benefits they promised.

The problem is that DeVos is a fan of for-profit colleges in general, and she hasn’t moved to put this rule in practice. DeVos maintains that the current rule has too much leeway, and she claims to be developing another, better rule.

But the courts aren’t impressed. Last month, a judge ordered her to get a move on, calling the delays she created “arbitrary and capricious.” DeVos didn’t follow through, so now she’s being sued in an attempt to get her to comply with the court order.

The National Student Legal Defense Network brought the suit on behalf of the California-based Housing and Economic Rights Advocates. In a press release, NSLDN president Aaron Ament said: “The students we are trying to help have been doubly victimized – first by the for-profit colleges that deceived them, and now by the federal government that refuses to help.”

NSLDN says that borrowers deserve benefits — including discharge of these bad loans, reimbursement for payments made and clearing of their credit history to remove adverse events associated with these loans. In addition, defrauded borrowers should be eligible for new federal student aid to help them pursue their educations.

But this case isn’t the only instance in which DeVos has given for-profit colleges a leg up.This summer, she tried to absolve these institutions of the Obama-era requirement to disclose accurate information about graduation rates and employment statistics.

Many for-profit colleges use rosy and lofty claims about the status of their graduates as an enticement that don’t reflect reality. The “gainful employment” rule denied federal funding and guarantees for loans to schools that failed to comply with the goal of addressing the extremely large numbers of defaulting borrowers tied to misleading advertising practices.

In addition, the Department of Education has effectively starved out the staff designated to investigate claims made by borrowers seeking redress. There are no longer any full-time staffers in charge of processing borrower complaints. This slowdown drove the former student loan ombudsman at the Consumer Financial Protection Bureau out of his job; he was too frustrated with being stymied when it came to advocating for borrowers.

Notably, for-profit colleges have been a problem for a long time, and it’s a bipartisan issue. In the Reagan administration, Education Secretary William Bennett  described these institutions as “an outrage perpetrated not only on the American taxpayer but, most tragically, upon some of the most disadvantaged and most vulnerable members of society.”

Photo Credit: Gage Skidmore/Flickr

25 comments

Chad Anderson
Chad Anderson11 days ago

Thank you.

SEND
Belinda Lang
Belinda Lang26 days ago

Betsy is a disgraceful witch who is the epitome of evil.

SEND
Debbi W
Debbi W27 days ago

Karin is right. DeVos is an ignorant twit, put in a position she has no clue how to do and, like the conman in the white house, has no interest to learn. Maybe be she isn't capable of learning.
Betsy DeVos is another entitled knitwit, who had the opportunity to get a good education but learned very little. She's just another evil creature from trump's swamp.

The terrible fact is that no matter how embarrassing she is, the damage she is doing to our educational system and the students is disastrous. The conman knew she's an idiot and knew she would destroy our Dept. of Education. Remember, the republicans want to _privatize_ everything they can, which would mean that everyone in this country would be facing a large increase in their cost of living, and many would not be able to afford even the basics.

SEND
Karin Hanson
Karin H27 days ago

This "privileged" ignorant Twit is a total disgrace not only to the Repugs but the entire USA!! Only reason she still has the position is her $$$millions in donations to the mango maggot.

SEND
Peggy B
Peggy B27 days ago

TYFS

SEND
Alea C
Alea C27 days ago

She is a disgusting human being, which is why the other disgusting human being appointed her. She's also the only cabinet member to get her own armed security force costing taxpayers $20 BILLION through Sept 2019.

SEND
Barbara V
Barbara V27 days ago

Mark my words--this bitch is one of the most hideous monsters on Capitol Hill and, of course, appointed by the supreme monster, Trumputin. We the complacent people had better wake up before it's too late and get these insects out of office. Why is such evil tolerated? Do you WANT America to fail? I'd like to think you don't.

SEND
Wesley Struebing
Wesley S27 days ago

She's also trying to gut Title IX protections for people who have been sexually assaulted. She wants to allow the alleged perp to cross-examine the victim. How wrong is THAT?! DeVos MUST go!

SEND
Debra G
Debra G27 days ago

Student loan debt is crippling a generation of people. Cruella de Vos is one of the worst people in this administration.

SEND
john c
john casablanca27 days ago

As long s De Vos is involved with the education system, she will always prefer "pay for profit education" over public education. No one in the Media has investigated her personal ownership of stocks for the "pay for profit education", and if they have, they haven't released it. I am certain that somewhere in her portfolio there is a conflict of interest. She should not be the EDUCATION SECRETARY, she as the person who appointed her should be in a new department, named SCAM THE
AMERICAN PEOPLE", that would suit them better.
John C./Houston, Tx.

SEND