Trump changes higher ed with rollback of Obama-era consumer protections

Source: Danielle Douglas-Gabriel, Washington Post, July 9, 2017
 
Step by step, the Trump administration is walking back policies and rules in higher education that its predecessor said were needed to protect students who rely on federal funding to pursue a degree. … Through the first half of the year, the department led by Education Secretary Betsy DeVos has withdrawn, delayed or announced plans to revamp more than a half dozen Obama-era measures involving federal student aid. …

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Betsy DeVos delays 2 Obama-era rules designed to protect students from predatory for-profit colleges
Source: Valerie Strauss, Washington Post, June 14, 2017
 
The Trump administration is suspending two key rules from the Obama administration that were intended to protect students from predatory for-profit colleges, saying it will soon start the process to write its own regulations.  The move made Wednesday by Education Secretary Betsy DeVos was a victory for Republican lawmakers and for-profit colleges that had lobbied against the rules. Critics denounced it, accusing the administration of essentially selling out students to help for-profit colleges stay in business.

Trump’s Administration Is Making It Easier for For-Profit Colleges to Screw Over More Students
Source: Michelle Chen, The Nation, March 31, 2017
 
Education Secretary Betsy DeVos’s controversial pick for a special assistant—for-profit college corporate lawyer Robert Eitel, may be a portent. As counsel for Bridgepoint, the parent company of the now-tainted brands of Ashford University and University of the Rockies, was forced by the Obama administration last year to refund $24 million in tuition and debt costs to students, plus civil damages, after the Consumer Financial Protection Bureau found that its heavy marketing scheme for its online programs, and “deceived its students into taking out loans that cost more than advertised.” …


Betsy DeVos’s Hiring of For-Profit College Official Raises Impartiality Issues
Source: Patricia Cohen, New York Times, March 17, 2017
 
As chief compliance officer for a corporate owner of for-profit colleges, Robert S. Eitel spent the past 18 months as a top lawyer for a company facing multiple government investigations, including one that ended with a settlement of more than $30 million over deceptive student lending.  Today, Mr. Eitel — on an unpaid leave of absence — is working as a special assistant to the new secretary of education, Betsy DeVos, whose department is setting out to roll back regulations governing the for-profit college sector.  The Education Department says Mr. Eitel has conferred several times with its ethics officer to avoid conflicts. But it says he is not precluded from having a voice on general issues and regulations that affect the for-profit college sector. Ethics experts said Mr. Eitel’s position, which has not been announced publicly, could nonetheless bump up against federal rules involving conflicts of interest and impartiality, particularly given his position as a vice president for regulatory legal services at Bridgepoint Education Inc., an operator of for-profit colleges, during federal investigations into the company. … Mr. Eitel, an Education Department lawyer under President George W. Bush, has been a stalwart critic of federal regulation of both for-profit colleges and K-12 education under the Obama administration. A department spokesman, who requested anonymity, said Mr. Eitel is part of a “beachhead” team, paid staff members who are temporarily helping to lead federal agencies as the Trump administration gets up and running but do not require Senate confirmation.

… For-profit higher education has repeatedly been tarnished by scandal. But since the election in November, stocks in the sector have soared — Bridgepoint’s has climbed more than 40 percent — as President Trump’s White House has made clear that it is undertaking a campaign to slash government regulations. Ms. DeVos and other administration officials have indicated that they do not plan to continue President Barack Obama’s regulatory crackdown on career-training colleges. … Bridgepoint — a publicly traded company that operates Ashford University and University of the Rockies, enrolls roughly 50,000 students, and primarily offers online degrees — has come under frequent scrutiny by federal and state watchdogs. …

For-Profit Colleges Gain Beachhead in Trump Administration
Source: Annie Waldman, ProPublica, March 14, 2017

Until June 2016, Taylor Hansen lobbied for the largest trade group of for-profit colleges. At the forefront of its agenda: eliminating a rule known as “gainful employment,” which can take away federal funding from for-profit colleges if their graduates fail to earn enough to repay student loans.  Last week, that goal started to become a reality. The U.S. Department of Education delayed the deadline for colleges to comply with certain provisions of gainful employment, saying it plans to review the rule. … Hansen said that he isn’t working on gainful employment regulations. Still, his hiring shows how closely the Trump administration is in sync with the for-profit education industry, which has long been criticized for loading students with debt that they struggle to pay off. The sector’s market value and enrollment plunged under the Obama administration, which instituted the gainful employment rule, and chains such as Corinthian Colleges and ITT Educational Services shut down. Now, it anticipates a resurgence under President Donald Trump.

… Both Trump and his education secretary are familiar with for-profit colleges. Trump owned a for-profit education company, and paid $25 million last November to settleTrump University students’ allegations of high-pressure sales tactics and unqualified instructors. His education secretary, Betsy DeVos, has been a champion of privately run schools and has invested in at least one company with for-profit college holdings. … Under Obama administration policies, which banned lobbyists from joining any agency they had recently lobbied, Hansen would have been ineligible to work for the Education Department. During his campaign, Trump promised he would “drain the swamp” and suggested that he was open to banning lobbyists from working in his administration. Shortly after his inauguration, however, Trump signed an ethics order that weakened the rules put in place during the previous administration. … Hansen’s “beachhead” position at the Education Department lasts up to four months, he said, and could lead to a permanent role. …

For-Profit Ed Sector Rebounds Under Trump, etc.
Source: National Center for the Study of Privatization in Education, February 28, 2017

The day of the presidential election, many for-profit education companies were trading near historic lows. In the tertiary sector, DeVry (DV) closed November 8th at $23.50, down 36 percent over five years; Strayer (STRA) at $58.68, down 38 percent over the same period; Apollo (APOL) at $8.73, down 92 percent; and American Public Education (APEI) at $14.85, down 61 percent. In addition, in the K-12 sector, K12 (LRN) closed November 8th at $11.19, down 67 percent over five years. In the fifteen weeks since Trump’s election, all five stocks have climbed considerably: DeVry closed February 24th up 39 percent; Strayer, up 29 percent; Apollo, up 14 percent; American Public Education, up 64 percent; and K12, up 62 percent. Moreover, Laureate (LAUR) returned to the public market at the beginning of February, raising $490 million with an initial public offering of 35 million shares, reported The Baltimore Sun. The Baltimore-based company was publicly traded from 1993 to 2007, when it was taken private in a management-led buyout. There should be little mystery to this transformation. “Top officials in Washington who spearheaded a relentless crackdown on the multibillion-dollar industry have been replaced by others who have profited from it,” reported Patricia Cohen of The New York Times. Secretary of Education Betsy DeVos has been an especially ardent advocate of for-profit educational management. …