DOE sides with Predatory For Profit Schools
June 2016 the U.S. Department of Education (DOE) proposed the “Borrower Defense Regulation”. The proposed regulation was added to the Federal Register for public comments; overwhelmingly the public approved of the proposal, which removes mandatory pre-dispute arbitration clauses and class action waivers from enrollment agreements. The proposal makes it easier for students to have their loans discharged when fraud can be proven.
November 2016 the William D. Ford Federal Direct Loan program was amended to make the proposal the new policy. Other notable programs were also amended to include the discharge provisions for the Federal Perkins Loan, Federal Family Education Loan (FFEL) and the Teacher Education Assistance for College and Higher Education (TEACH) Grant programs.
The aforementioned & other contractual student loan changes are severely overdue as student debt has doubled in the past decade, ballooning to over 1.3 trillion dollars. Loan delinquency is also on the rise, in fact one in ten borrowers are 90 or more days past due on their loans, while 20-30% of adults under age 30 have student loan debt with many working multiple jobs to survive while paying off their student loans.
Because of the large sums of money & federal guarantees the student loan market has become a target for honest and dishonest lenders and institutions. During this past decade administrators have steadily attacked laws giving borrowers protections from predatory lenders. In fact, institutions in the financial student loan business have seen profits soar while more students are falling behind on their debts. Which brings us to DOE Secretary Betsy DeVos, who has decided it’s time to undo these consumer borrower protection laws, dismayed at this turn of events Attorney General Maura Healey along with 19 states are suing Secretary DeVos & the DOE for rolling back these protections.
In a prepared speech Secretary DeVos told the press “I’m getting paid, the lobbyists, the institutions all pay well, this is America, there are no morals, only the haves and have nots. These students will have money someday, that’s why they endured getting their educations. But for now they must pay and if they play their cards right, they can exploit the next generation. After all we want tomorrow’s youth perpetually indebted, that way they’ll be easily controlled and will accept the status quo. Oh, yeah let’s not forget, throw in a sprinkling of partisan divide & they won’t know what hit them, isn’t life great, no further questions.
More can be found at http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-07-06-ag-healey-sues-education-secretary-betsy-devos.html and at http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-06-14-intervention-to-protect-students.html