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Financial Planning > College Planning > Student Loan Debt

16 States Blast DeVos Over Third Delay of For-Profit College Rules

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Sixteen states plus the District of Columbia are opposing Education Secretary Betsy DeVos’ third delay of disclosure requirements in a DOE rule designed to prepare for-profit college students for jobs after graduation.

The requirements are part of the Gainful Employment Rule, which was created by the Obama White House and took effect in July 2015. Compliance with its disclosure requirements aimed at informing students about the costs, average debt load and default rate of graduates, however, was initially delayed until April 2017.

(Related: GOP’s Anti-Reg Stance Is a ‘Big, Greasy Baloney Sandwich’: Sen. Warren)

Then, a month before that deadline, the DOE, under the Trump administration, delayed the compliance deadline until July 1, 2017, and issued another delay on June 30 for a full year. On July 1, 2018, the department issued yet another one-year delay, until July 1, 2019.

The latest delay “will unnecessarily harm student borrowers, constitutes an abrogation of the department’s responsibility to protect students and taxpayers, is not adequately justified, and violates the rulemaking requirements of the Higher Education Act,” according to a letter the attorneys general sent to DeVos on Wednesday.

“Delaying disclosures to students about the high debt load and poor outcomes for graduates of certain programs harms prospective students who are considering whether to enroll in those programs,” the letter says. It goes on to note that the department failed to provide the required notice and comment rulemaking as well as the opportunity for public comments before issuing the latest delay.

It was signed by the attorneys general of Maryland, Pennsylvania, Washington state, Connecticut, Minnesota, Iowa, Virginia, Illinois, New Jersey, Hawaii, Oregon, Massachusetts, Delaware, California, New York, North Carolina and Washington, D.C.  All but New Jersey, plus three other states, sued the DOE in October of last year for an “unlawful” delay of the Gainful Employment Rule.

(Related: Higher Ed Bill Like Coal in the Stockings of Student Loan Borrowers)

The rule was adopted following investigations of massive deceptive recruiting and fraudulent lending practices at for-profit colleges aimed at attracting large numbers of students, including many who couldn’t afford attendance, with the promises of lucrative jobs afterward. Many students were left before or after graduation with burdensome debt loads they couldn’t afford, and several for-profit colleges including Corinthian and ITT failed, following lawsuits and investigations by federal and state agencies and the loss of access to federal loans for students.

The DOE under DeVos has taken steps to undo regulations that protect students from fraudulent practices of for-profit schools. It shrunk a loan relief program for defrauded students at the failed Corinthian Colleges chain — a move recently blocked by a federal judge — sharply reduced its staff looking into deceptive and predatory lending practices at for-profit schools and reinstated an accrediting body, the Accrediting Council for Independent Colleges and Schools, despite its failure to comply with federal quality and management requirements.

The department has also hired several executives from the same for-profit institutions that the department had been investigating.

“Over and over again, the Trump-DeVos Department of Education has put special interests before the students they’re supposed to serve,” said Attorney General Barbara Underwood of New York in a statement released today about the group letter sent to DeVos.


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