Betsy DeVos, Secretary of the U.S. Department of Education, will be speaking at Harvard University’s Kennedy School this Thursday, September 28th. In a letter to the Secretary, the Project on Predatory Student Lending has requested the Secretary meet with former students who have been harmed by the deceptive practices of for-profit colleges. The letter notes that “as the head of the Department of Education,” DeVos has “the legal authority to cancel the student debt that these borrowers face as a result of the fraudulent behavior of these predatory colleges.” Under DeVos’s leadership, the Department of Education delayed new borrower defense rules scheduled to take place July 1, 2017. These rules would have protected borrowers from deceptive practices in higher education, while making it more difficult for predatory schools to take advantage of students by, as one example, prohibiting the use of forced arbitration clauses that block students’ ability to sue their school in court.
DeVos has justified rolling back these protections by claiming, “Under the previous rules, all one had to do was raise his or her hands to be entitled to so-called free money.” This statement is a gross mischaracterization of borrower defense, and is completely out of touch with the reality facing students who have been targeted and ripped off by the predatory for-profit industry. Students face tremendous barriers in getting the Department to recognize their legal entitlement to loan cancellation. For example, Project client Sarah Dieffenbacher has petitioned the Department at least four times for borrower defense. Rather than cancel her loans, the Department used coercive measure to collect on them, including attempts at wage garnishment. Ms. Dieffenbacher, a single mother who was falsely told by Everest College that its paralegal program was accredited by the ABA and that she could transfer her credits towards a law degree, is in jeopardy of losing her car and her apartment because of the Department’s actions. Since DeVos assumed the position of Secretary of Education, The Department of Education has not acknowledged a single borrower defense application, ignoring its legal responsibility to cancel student loan debt for students who were defrauded by the illegal and deceptive practices of for-profit colleges.
Borrowers are seeking recognition of their rights, not “free money.” In fact, the only “free money” at issue is the taxpayer money that flows into the coffers of predatory for-profit colleges. As the Project on Predatory Student Lending’s letter to DeVos states, “for-profit colleges are the most tax-subsidized of any private industry. More than $30 billion in taxpayer money goes to this industry each year in the form of federal student loans.” Billions of taxpayer dollars are funneled into fraudulent corporate profit while DeVos is doing nothing to prevent this abuse.
The Project on Predatory Student Lending asks that DeVos make time to meet with former students of for-profit colleges. After hearing firsthand about the tremendous harm caused by the for-profit college industry, the Project hopes that DeVos will re-think her policies to favor students and taxpayers, not corporate profits. The Boston Globe covered the request here.