DeVos: Americans Must Pay Back Loans for Bogus Degrees

Call me crazy, but I happen to think that when a shady for-profit “college” tricks people into taking out a lot of money to pay for worthless degrees, the defrauded students shouldn’t have to spend the next couple decades of their lives trying to pay off these loans.

Student debt is a big enough problem for people who go to quality colleges and obtain knowledge and job offers, so I can’t imagine how hard it is for students to take on that financial burden without having the added benefit of marketable skills.

Under Barack Obama, the Department of Education implemented a program that would forgive the loans of people who attended closed schools like Corinthian Colleges. The argument is pretty sound: since these students didn’t receive the education or job placement they had been promised, why should they be thousands of dollars in debt?

Unfortunately, Donald Trump and Betsy DeVos don’t seem to see the situation that way. The DoE has quietly stopped approving loan forgiveness for these students, leaving them on the hook for their wasted tuition and sizable interest payments, to boot.

Not that DeVos ever made a formal announcement about this decision. This news instead came from inspector general for the DoE, a position that’s independent of the department. The Office of Inspector General has formally recommended that the DoE restart the process of restitution for these scammed students.

In the closing months of Obama’s presidency, the Education Department received 46,274 claims and ultimately approved 60 percent of them, effectively cancelling $550 million in loans. Compare that to Trump’s DoE, which has received 25,991 claims and approved none of them. It has formally rejected two of the requests, however, something the previous DoE never did.

Prior to the inspector general’s memo, we did at least get a hint that something fishy was up a couple months ago when people inside the DoE leaked to the press that DeVos was considering only partially forgiving student loans, though no one was willing or able to speak on the record about that.

DeVos has previously stated that she doesn’t like the idea of taxpayers having to bail out the defrauded students’ loans. Here’s another thought: she could hold the fraudulently “educational” institutions financially responsible instead so the burden is minimal to taxpayers.

Oh, who am I kidding? This summer, DeVos also put a hold on Obama-era rules that established some standards of accountability for for-profit schools, essentially ensuring that more students will find themselves similarly in debt with a meaningless degree.

Why is DeVos so reticent to come down on sketchy for-profit institutions? Well, for starters, her boss, Mr. Trump, saw his own Trump University have to pay back $25 million in tuition to students who had been ripped off. She also placed a former for-profit college executive in charge of overseeing for-profit college fraud, meaning her team may be steering her in the wrong direction.

DeVos has also personally profited off student debt. Upon joining the administration, she disclosed and agreed to divest from holdings in Performant Financial Co., a debt collection agency.

There is some small amount of hope that DeVos will still agree to get rid of some of the loans on a case-by-case basis. Just because she’s getting rid of the Obama-plan doesn’t preclude her from addressing the defrauded students’ plight in another way.

Even if she were to ultimately help out former Corinthian Colleges attendees, it’s still a cruddy time for them since their student loan forgiveness has been paused indefinitely. As Vice points out, people with credible claims have been losing even more money since, by not making the payments, they’re racking up greater interest.

For that reason, at the very least, DeVos should be upfront with these students about what her plan is.

Photo credit: Thinkstock

46 comments

Marie W
Marie W12 days ago

thanks for sharing

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Jim Ven
Jim Ven5 months ago

thanks

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Jim Ven
Jim Ven5 months ago

thanks

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Jerome S
Jerome S5 months ago

thanks for sharing

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Jerome S
Jerome S5 months ago

thanks for sharing

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Jessica C
Jessica C5 months ago

The whole "for profit" education systems are sketchy to begin with.

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Julie D
Julie D6 months ago

It should be the responsibility of the fraudulent schools to pay off the loans, since they are the cause of the problem.

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JT Smith
Past Member 6 months ago

My cousin's husband has the same apparent blame the victim mentality that Trump's DoE has taken on. It's a mentality that allows them to excuse and even foster their own greed considering how deep their own financial stakes are.

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Peggy B
Peggy B6 months ago

Mike Chrissie...Did you read the article?

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Marigold A
Past Member 6 months ago

Thank you for posting this expose.

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