Newspapers reveal human costs of Betsy DeVos abandoning defrauded students
Research ››› ››› BRETT ROBERTSON
The Trump administration has failed to provide relief to tens of thousands of students who were left with a “near-worthless degree” and large amounts of debt after attending fraudulent for-profit colleges that have since closed. Betsy DeVos’ Department of Education has delayed implementation of new rules that would better protect student borrowers, and several recent newspaper stories have captured the human cost of the lingering debt.
DeVos hasn’t approved any applications for debt relief from defrauded students
AP: DeVos has not approved a single application for debt relief from 65,000 defrauded students. The Associated Press reported July 26 that the Education Department, led by Secretary Betsy DeVos, has not approved a single application for debt relief for over 65,000 students with pending claims for loan forgiveness since President Donald Trump’s inauguration. Most of these students were defrauded by the now-closed Corinthian Colleges or ITT Tech. [The Associated Press, 7/26/17]
DeVos delayed implementation of borrower defense regulations created to protect students defrauded by for-profit universities
After thousands of students were defrauded by for-profit universities, new rules were negotiated. Following a pattern of for-profit colleges defrauding students, the Obama administration renegotiated existing rules to better protect student borrowers. In the fall of 2016, the Department of Education announced new borrower defense rules designed to make it easier for students who were victims of fraud to apply for forgiveness and have their loans forgiven. [The Boston Globe, 6/5/17; NPR, 5/12/16; Los Angeles Times, 7/10/17; U.S. News & World Report, 6/29/16; Department of Education, 10/28/16]
Wash. Post: DeVos delayed implementation of borrower defense rule and is “sitting on tens of thousands” of debt relief applications. The Washington Post reported that the Department of Education was “sitting on tens of thousands” of debt relief applications -- more than 50,000 from Corinthian and ITT Tech alone. The Post reported that the new regulations were supposed to go into effect on July 1, but DeVos delayed their implementation and said she would reconsider them. According to Inside Higher Ed, the delayed rules will not be implemented while she renegotiates them, and “even under the rosiest of projections, new borrower-defense ... regulations wouldn't go into effect until 2019.” From the July 27 Washington Post piece:
A letter released Wednesday by Sen. Richard J. Durbin (D-Ill.) reveals that the Trump administration has done little to help defrauded student loan borrowers since taking office.
Through July 7, the Education Department had 45,092 pending claims from students who attended Corinthian and another 7,186 pending claims from former ITT Tech students, according to the letter. [Other] claims come from people who pursued degrees or certificates at other for-profit schools such as DeVry University and the University of Phoenix. All of those borrowers with pending claims have accrued about $143 million in interest on their loans during the waiting period. [The Washington Post, 7/27/17; Inside Higher Ed, 6/15/17]
Newspapers have highlighted the human impact of DeVos’ inaction on debt
LA Times reported on a student with $17,000 in debt and credits that won’t transfer. The Los Angeles Times reported that Claudia Chacon tried to further her education after completing a program at Everest College, but she found out that when a college closes, your credits will not transfer to a new university. From the June 16 report:
For Claudia Chacon, 25, of Los Angeles, a former student at Corinthian's Everest College, the decision [by DeVos to rewrite borrower defense rules] could lead to more difficulties in her attempt to get loan relief.
"It's been very frustrating for me because I can't get a straight answer," she said of her experience since applying to the Education Department about a year ago under the existing rules, which were scheduled to be streamlined. "We're still expected to pay for something that ... is not usable."
Chacon took out $17,000 in loans to attend an eight-month medical administrative assistant program at Everest College on Wilshire Boulevard in Los Angeles. She completed the program in 2012. But when she later tried to enroll in general education classes at Santa Monica College, she was told that her Everest transcripts were invalid because the campus had closed. [Los Angeles Times, 6/16/17]
The Oregonian wrote about a student who graduated ITT Tech with $25,000 in debt and "few useful skills.” Niesha Wright completed her studies at ITT Tech just before it closed in 2016, but her lawyer said the associate’s degree program -- which left her $25,000 in debt -- had taught her little, according to a July 10 report in The Oregonian:
Niesha Wright completed an associate’s degree program at ITT Tech last summer, weeks before the for-profit giant began to crumble under increasing regulatory pressure from the Obama-era Department of Education.
She didn’t leave the program as a proud graduate. The 40-year-old Portland resident had more than $25,000 in federal student loans and few useful skills to show for her two years at ITT Tech, according to her attorney. Wright hoped to obtain relief, along with tens of thousands of other jilted ITT students, through a federal student loan forgiveness program geared toward students who experienced misleading or predatory treatment at the hands of largely for-profit colleges.
But on June 14, U.S. Secretary of Education Betsy DeVos said she would delay the Obama administration’s proposed rules governing the loan forgiveness program. The Obama rules, set to take effect July 1, were designed to streamline the application process for students like Wright. [The Oregonian, 7/10/17]
Miami Herald wrote about a student who didn’t hear back on his loan forgiveness application after his program shut down and joined the Army to repay his debt. Jay Frierson’s school closed after he had taken six months of classes, leaving him with $10,000 in debt. He applied for loan forgiveness but “never heard back,” according to the Miami Herald. Ultimately, Frierson joined the Army Reserve to help dig his way out of debt. From the June 15 story:
In Jay Frierson's case, he isn't sure. The 30-year-old from Broward County's Oakland Park said he owes $10,000 for the handful of nursing classes he took for six months at Dade Medical College in 2010. The program shut down almost overnight in 2015, and the man who headed the school, Ernesto Perez, later pleaded guilty to campaign finance fraud.
"They were focused on people making payments, and not teaching us the curriculum," he said. Frierson joined the Army Reserves to help pay back that debt.
He said he applied for loan forgiveness, but he never heard back. Legally, students like him can still take their fraud case to the state and try to get their debt wiped out, but the process can be arduous. [Miami Herald, 6/15/17]
Mercury News reported on a woman who did not get married because of debt to her daughter’s now-closed school. Christina Enriquez canceled her marriage because she didn’t want to burden her spouse-to-be with the dismal credit she had from sending her daughter to Heald College, one of the Corinthian schools that later closed, according to a June 15 Mercury News report:
Christina Enriquez, 48, didn't realize how much she was signing away when she put her name on a $25,000 loan for her daughter, Melissa, to study medical coding at Heald College in Salinas. The school "never helped her go out there and actually get the job" as they promised, she said. Enriquez is making payments on the loan but one lost job and an expensive medical procedure later, she still owes around $15,000 and the loan feels like a permanent cloud. "This bill just never goes away and I don't think it ever will," said Enriquez, who now works at Walmart.
Christina Enriquez said she even declined a marriage proposal because she was afraid the loan would damage her boyfriend's good credit. "It stopped me from getting married," she said. "I refused to marry my boyfriend because I was afraid this was going to haunt him."
"I don't know what to do," Enriquez said. "They don't stop charging. It just keeps accumulating more and more and more." [The Mercury News, 6/15/17]
Wash. Post reported that even some students who were approved for relief are still waiting. Jessica Madison was given notice of debt relief at the end of the Obama administration and is still waiting for the debt to actually be forgiven, over half a year later, according to The Washington Post. Meanwhile, her wages are being garnished by the government that said it would forgive her loans. From the July 9 report:
In early January [just before Trump’s inauguration], Jessica Madison received a notice from the [Department of Education] approving the forgiveness of $19,000 she amassed in debt for a paralegal program at Everest College in Clearwater, Fla., a for-profit school that was operated by now-defunct Corinthian Colleges. The notice, reviewed by The Washington Post, said the debt would be discharged within 60 to 120 days, but it was not.
Instead, Madison said the government has been garnishing her paycheck to recoup the debt. She said she has struggled to repay the money since leaving Everest in 2009 because it took her nearly three years to land a full-time job.
“I wasn’t able to have power for weeks because my checks couldn’t cover the bills,” Madison said. “This has put me in a deep hole that is taking long to crawl out of.” [The Washington Post, 7/9/17]