New Higher Education Bill Rolls Back Obama-Era Safeguards

Source: Erica L. Green, New York Times, December 12, 2017
Congressional Republicans begin work on Tuesday on an extensive rewrite of the law that governs the nation’s system of higher education, seeking to dismantle landmark Obama administration regulations designed to protect students from predatory for-profit colleges and to repay the loans of those who earned worthless degrees from scam universities.  But in its systematic effort to erase President Barack Obama’s fingerprints from higher education, the measure before the House Committee on Education and the Workforce could undermine bedrock elements that have guided university education for decades. One provision alone could do away with the system of “credit hours” that college students earn to complete their degrees. …


Education Dept. could scale back help on loans
Source: Maria Danilova, Associated Press, October 30, 2017
The Education Department is considering only partially forgiving federal loans for students defrauded by for-profit colleges, according to department officials, abandoning the Obama administration’s policy of erasing that debt.  Under President Barack Obama, tens of thousands of students deceived by now-defunct for-profit schools had over $550 million in such loans canceled.  But President Donald Trump’s education secretary, Betsy DeVos, is working on a plan that could grant such students just partial relief, according to department officials. The department may look at the average earnings of students in similar programs and schools to determine how much debt to wipe away. …

States Sue Over Scrapping of Obama-Era Rules on For-Profit Colleges
Source: Douglas Belkin, Wall Street Journal, Oct. 17, 2017

A coalition of Democratic attorneys general from 18 states and the District of Columbia filed a lawsuit Tuesday against the U.S. Education Department and Secretary Betsy DeVos for not enforcing an Obama-era rule intended to protect students and taxpayers from predatory for-profit schools. In June, Mrs. DeVos suspended the so-called “gainful employment” rules before they took effect. If enacted they would have cut off federal funding for schools where students leave with high debt and end up in jobs with low salaries. The suit, filed in the U.S. District Court in Washington, D.C., calls Mrs. DeVos’s suspension of those rules “unlawful” and accuses her of trying to “run out the clock” through a series of delays until she can implement new regulation…..

Trump and DeVos fuel a for-profit college comeback
Source: Michael Stratford, Politico, August 31, 2017
For-profit colleges are winning their battle to dismantle Obama-era restrictions as Education Secretary Betsy DeVos rolls back regulations, grants reprieves to schools at risk of losing their federal funding and stocks her agency with industry insiders.  More than seven months into the Trump administration, DeVos has: Moved to gut two major Obama-era regulations reviled by the industry that would have cut off funding to low-performing programs and made it easier for defrauded students to wipe out their loans; Appointed a former for-profit college official, Julian Schmoke Jr., to lead the team charged with policing fraud in higher education — one of a slew of industry insiders installed in key positions. …. Stopped approving new student-fraud claims brought against for-profit schools. The Education Department has a backlog of more than 65,000 applications from students seeking to have their loans forgiven on the grounds they were defrauded, some of which date to the previous administration. …

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. …

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. …