There is little to be surprised about here. The US elected a con man who ran his own for profit educational scam as president. He is not very likely to be an advocate for others cheated by fake schools such as his.
Trump supporters wanted someone to stand up for the little guy but instead they got a dishonest plutocrat who is taking them and the rest of the country for the fools that they appear to be.
5
When they changed the direct federal funding model in 1972 to the Pell program in 72, this transferred all of the risk to the student.
The schools were no longer accountable to the fed regulations in order to get their money. Now, they could get their funding from thousands of different sources, the eager, trusting students - and it was far easier to try pulling the wool over those thousands of potential sources than it was to pull them over one.
The real villain here is the US gov who turned higher ed into a corrupt money making venture and allowed massive systemic corruption to go unchecked for decades. They are the reason that so many colleges have adopted extremely predatory practices in order to compete. Accrediting boards often consist of former workers from the schools and they are paid by the number of schools that they accredit, so there is little chance of them working against them.
3
DeVos has to be one of the worst appointees in a Cabinet filled with undeserving mediocrities. The bigger trend predates Trump by decades: attacking social mobility. Conservatives want opportunity in America to be dynastic, not for just anybody. If nothing else compels young voters to reject the Right, this must.
3
The Education Department needs to drastically reduce the amount of loans it gives out and be much more selective with the schools it chooses to support. Easy federal money is the source of the problem, not the predatory schools. As long as there is easy money being handed out by the government, there will be predators who take advantage of the system. These for-profit sham schools could not exist without federal funding, as no private banks would consistently loan large sums to students for worthless degrees at for-profit schools no one has ever heard of. Although the product of good intentions by those on the left, subsidized federal loans wind up hurting most those individuals they are intended to support. I’m sure Ms. Bauer wishes the government had never loaned her the $45k, as now she has a huge student loan payment each month with a worthless degree that she wasted years of her life obtaining.
4
Why do for-profit schools exist? Why do people go for them?
5
If you're gonna include schools that defrauded their students, you really should include public universities that offer their middle- and working-class students liberal arts and social science degrees in such majors as the various identity studies and anthropology.
3
To the author, curious if your research uncovered whether the same issues are plaguing the Public Service Loan Forgiveness program? Thanks.
@PBS That's got a whole different set of problems and issues. Applications for PSLF are being processed within a reasonable timeframe, but the program's complexity -- and the problems loan servicers have had getting guidance from the Education Department on the nuances -- have led to a sky-high rejection rate.
Here's a recent article about the problems a government audit uncovered: https://www.nytimes.com/2018/09/27/business/student-loan-forgiveness.html
1
My cleaning woman thinks she "went to college"; she never was able to get a job. She went to what was really a secretarial school, not "college". They led her to believe she would be getting "a degree". Of course, she was too uneducated to not ask what kind of a degree this was. She should never have been going to any college of any kind - she's just not a very bright woman. She's not even a very good house cleaner.
People make terrible decisions every single day. My cousin decided she should have a "career" and not just a "job", and decided to return to college when she was 50. She took out $65,000 in student loans - for an in-state university. Of course, this also included loans to cover her apartment rental (didn't want to move back in with her mother) and her car payment.
She got her Masters as well and has been teaching in an ESL program since. It doesn't pay very well. She will be 65 in Dec and would love to retire but cannot afford to do so. She has been living with her mother since she got a job - could not afford rent or more loans.
Should the loans of either be forgive? No. If they are, where does this stop? Harvard should have told me that a degree in anthropology might now lead to many job prospects?
What should stop is ANY student loans for anything other than a non-profit college or university offering BA, BFA, or BS degrees. Most of these loans should never had been made in the first place.
5
@India You're from the Midwest, huh? Using your logic, why should we bail out the soybean farmers who voted for Trump and now have mountains of the stuff in their backyards because of the new tariffs? They should have known that a fool for a president would impose foolish policies. How about those students of "Trump University" that received NOTHING in return for their tuition?
You really do not understand the issue, at all!
3
@India
I can understand taxpayers wanting "adult" students to repay at least part of their foolishly taken out loans. They deserve to take some responsibility.
But it seems does seem a bit crazy that the owners of these fake learning institutions can keep the profits and hide behind corporate bankruptsy while we have outlawed bankruptsy to students, and dump the responsibility on the taxpayers.
1
Betsy DeVos, the multi billionaire heir to the Amway fortune, has two agendas:
pushing kids to be schooled in religious schools or homeschooled;
and destroying colleges as an entry way to middle class life for millions of kids, as they have been since the original GI Bill after WWII made it possible for so many veterans who would otherwise have had NO chance to go to college/ enter middle class life.....
DeVos, like the rest of the Trump/GOP administration, wants Americans to become the peasants of a totally uneducated, non-science believing, but religious, country.
7
Lost in the glare of the orange fire ball that is trump are the lesser functionaries whose crimes appear on the back pages of the news. Ideologues like DeVos, Zinke, and Mulvaney who slither and hiss in the shadows. It is my hope that the House Democrats will haul these squinting vipers into the light of accountability.
9
When students select their College and take on the Debts of Tuition, they are all smiles and hugs. This ends when they have to pay back their loans. I am firmly against forgiveness. Students should pay for every cent borrowed unless they went to a State College which is the cheapest route possible. They are coming out of College to six figure jobs in many cases. Have no problem paying for the so-called "Millennial Experiences" yet don't want to repay the loans they took out.
2
@Philip W Do you know this for a fact? This has not been my experience.
2
@Philip W
Read a few articles on student debt and you will find that many of these students are not graduating with 6 figure salaries. And this article, this article in particular, is about kids who graduate with "fake" degrees. They won't be earning six figure salaries any time soon.
2
It seems that Secretary of Education Betsy DeVos - as a big time investor in for-profit educational institutions, e.g., DeVry Univ- has a major conflict of interest in this loan forgiveness program. Surely the least she could do is recuse herself from decisions regarding this program? She would do well to follow the example of former Attorney General Jeff Sessions who recused himself from DOJ's Russian collusion investigation. Of course Mr Sessions was just fired by President Trump. But Mr Sessions left an honorable man - so could Ms DeVos!
3
Mark my words, this will be the next be recession. Everyone in the country should start getting prepared.
3
@Liberty In
So are you saying that the taxpayers should pick up the tab because you chose to borrow to invest in an education that does not produce a return that exceeds the cost?
No reporting on whether any individuals who were executives at these institutions of lower learning have been prosecuted for fraud, been found guilty by a jury of American citizens, and sentenced to prison terms. I recall reading in NYT articles how the students were bamboozled and pressured into signing up for these schools and encouraged to take out these loans by sleazy marketers. But it's really the higher-ups that should take the fall. The ones that made millions ripping off their fellow Americans.
Obama really failed in not prosecuting the bankers responsible for the 2008 recession. The criminal types barely stop their crooked schemes when they're held accountable and their lives are ruined. When they're not held accountable, expect more of the same behavior once they figure out how to regroup.
7
Why should we expect Trump, of Trump University, to sympathize with students who were defrauded by high tuitions and worthless courses? Caveat student!
7
The only group that are being defrauded are the American taxpayers. They are the ones who are paying for mistakes made by adults. If you buy a car and it turns out to be a lemon does the Federal Government indemnify you? If you buy a house and it has termites or the concrete in the foundation is defective, does the Federal Gov repair your house? Are college degrees in most fields, many of them based on majors favoring progressive social theories, useful? Have those degrees holders, who frequently employed at the level of a high school graduate, been defrauded? Why did the Obama administration capitulate and abandoned a rigorous evaluation of the value of college degrees, when pressure was applied by progressive college administrators? As the other major NY newspaper had editorialized on numerous occasions, these for profit colleges became the target of the political left with the Obama Admin rendering them ineligible for government guaranteed student loans and blocking service members from attending, resulting in many of them closing, and the students failing to obtain their degrees. Non-profit colleges were not disciplined for similar infractions. The availability of easy money can result in careless behavior. With the Obama Administration"s aggressive policy of forgiving “fraudulent” for profit and all other college loans based on a variety of social service employment and other excuses, the American taxpayer is the only group being taken to the cleaners.
6
@Paul
If you are defrauded in a purchase, you get to cancel the purchase.
Why should students be any different?
BTW, why not let students discharge their student loans in bankruptcy? That worked out well for Tiny Trump.
9
@GarakAhhh but what about all those parents who are getting ready to retire and they have their Childs student loan on their books? If a 100,000 bankers or real estate brokers were defaulting then our country would plunge into a recession. Oh wait, that already happened. This is the same thing. Just wait.
4
This says it all: "She has also appointed a former dean of DeVry University — a for-profit school that is the subject of some 10,000 fraud claims by former students — to oversee the unit that runs the program." She doesn't care. This article should be on the front page/social media of every school in the country...oops I forgot schools like DeVry do not have such things.
10
So Obama and Congress put something in place and right before he left the DoE forgave 15,000 out of 30,000 loans. Sounds like this program was never really helping kids until Obama's nth hour. Something tells me that more is at foot here - NYTimes? Anyone holding the DOE responsible for allowing these schools to exist? For allowing them to ever receive any credentials? Like buying a house far above your means, if the college you pursue is cheap and gives you As for every course, you should be suspect. But for the government to allow it, that is the real scam. What's going on with accreditation?!
4
People are asking why students fell for these fraudulent schools. They should have known better."
But here's how our greedy politicians took $$ to help these crooked schemes look respectable:
Bill Clinton was paid $17+ million by Laureate International Universities, which runs for-profit colleges worldwide. In 2015, Clinton accepted million$ to serve as their "chancellor." Both Bill & Hillary Clinton said during the 2016 campaign that college shouldn't be 'free' & opposed student loan bankruptcy discharge. While President, Bill Clinton signed legislation that basically ended student loan bankruptcy discharge. Bill Clinton personally profited from that legislation by taking $$ from schools entrapping students.
2012 Republican Presidential nominee Mitt Romney publicly enthused on the campaign trail about for-profit colleges- particularly Full Sail University - owned by Romney's campaign contributor & hedge fund buddy. Romney encouraged students to enroll at for-profit schools saying they're low cost is a "great value."
When you have supposedly respectable public servants like former President Clinton & newly elected Senator Romney shilling for these places because they're getting paid or collecting campaign funds, why shouldn't students believe these guys are telling the truth?
Nobody should insult the defrauded students asking why they're so dumb & irresponsible.
Ask Bill Clinton and Mitt Romney why they shamelessly profited from these frauds.
14
So Ms. DeVos thinks it's free money to help out these students that have been cheated out of college expenses. What about the $1.7 trillion in free money given to large corporations and the 1 percenters with the uncalled for tax bill? That apparently doesn't bother her or any others in the Trump administration. This is shameful. For a person like herself that had no worries about how to pay for herself or her children's college expenses to berate these students for trying to recover money they were cheated out of.
There's also all the other college students that have gone to ethical colleges, but leave with enormous debt. This is what the Secretary of Education should be looking at and not figuring out how the administration can pay for a tax bill that no one except the very rich really wanted.
7
Cannot wait for the Democrats in the house to march DeVos into hearings.
17
The regulations that allowed private financial institutions to get into the business of profiting from educational loans to students actually took off during the George W. Bush administration. Prior to that student loans were primarily made available through programs directly backed by the federal government. A case in point is the widely administered National Defense Student Loan.
3
The Federal Government is illegally seizing citizens benefits despite never having provided a hearing or notice of a hearing as guaranteed by the Constitution. Secondly, only the 'Holder' of the original signed note has rights to collect, and the chances the Federal Government has the original note are slim to none. Moreover, they are seizing funds based on claims that go back 20-30 years and are far beyond the Statute of Limitations and/or barred by the doctrine of Laches. I am about to file suit in Federal Court, and fully expect to win. I urge all who are subject to claims for student loans to seek the advice of an attorney.
4
Most of this happened during the Obama years.
@Shamrock Nonsense. Obama took note of an ongoing abuse, made policy to stop it, and then that policy was deliberately sabotaged after Trump put his fox DeVos in charge of the chicken house. You'll have to do a more persuasive job of yabbuting if you want to distract attention from this flagrant abuse of the rule of law.
18
Why doesn't the government vet colleges BEFORE approving the loans? As a taxpayer, I find it ludicrous that the Department of Education will loan money to students attending institutions that don't have a proven record. This would include for-profit and non-for-profit colleges. They are actually endorsing those schools if they loan to students attending there. The way the current system is set up, the taxpayers will be the biggest losers.
28
@Common Sense. Agreed 100% but this is largely due to policymakers wanting to have it both ways. Up front their focus is access to any and all who wish to pursue higher education, without regard for quality. It is only after the fact that some of those very same legislators now want to hold the schools accountable for uncollectable debts. They do not want to admit that we cannot have open and unlimited access without sacrificing quality and/or encouraging abuse. If we actually limited lending to quality institutions, it would close many poorly performing schools and mean that, no, not everybody can get into "college", even if that might be the better outcome given the $1.5 Trillion and counting.
1
@Common Sense That's a good point, and it's actually part of what's in the 2017 rules that the court just ordered to take effect. The rules require schools that appear to be at risk of generating claims to provide financial collateral to the Education Department. Industry groups have fought hard against that provision, and it's still the subject of lawsuits.
Another regulation, known as the "gainful employment" rule, aims to cut off federal loan funds to schools whose graduates don't earn enough to pay back their loans. Ms. DeVos has begun the process of rewriting that rule, but for now, the Obama-era version remains in effect.
7
@Common Sense:
AND the students who used their money, effort and time to get degrees from fraudulent "colleges".
1
I know there is a lot for Democrats to investigate starting in January, but I for one would like to see the Pirate known as Betsey DeVos hauled in front of an endless succession of televised interviews where she is forced to explain her conflicts of interest and her utter disregard for her fellow Americans
15
Loan forgiveness?
While Ditzy DeVos is at the helm?
Snowball's chance in Hades.
5
A clear breach of ethics from the Trump administration. Both Devos and Trump have multiple millions of dollars of profit at stake to them personally. Where is the congressional oversight? Free money indeed!
11
Surely, there's a tornado and a house awaiting Her.
Seriously.
8
A woman who owns 9 yachts and has never attended a public school should never be in charge of our educational system. FYI, predatory student loans also entrap those who study to be nurses, physical therapists and other vital professions. We have crippled an entire generation doomed to rentals, really old cars and substandard dental care, if at all.
As for liberal arts majors? An amazing amount go on to professions where only a masters degree or more is required, such as Juris Doctor
One more scary thought for all you naysayers out there, lots of young people I have met as a college professor cannot afford to think of taking on a medical degree and opt for a lesser position solely on the basis of the egregious cost of education. By the way, I have a BA in philosophy and an MFA and am a fully employed contributing member of society. Take away the arts and you can live in a desert with blinders, no music, no color, no fashion, no poetry, no design.
17
oh spare me...first, where will we draw the line between fraud and personal responsibility for bad decisions?
second, this article says the current administration has already dealt with 15,000 of these loans -- half what the Obama administration did in its 8 years. so...I am not clear why the "hazy path" is perceived as stalling....
@LJ
From the article: "Education Department officials confirmed that about 15,000 of those were granted partial forgiveness."
Partial forgiveness starts at 50% and goes down depending on gainful employment.
If the loans are eating up all the trickle down from the rich's tax breaks, how will GDP growth ever get above 5%?
3
@ConcernedThoughtPrayer yes, I did read the details, but it seems disingenuous to use the term "stall".
@LJ:
"Personal responsibility"....I take it you mean the kids who were lured to these fraudulent "colleges" by the ads and so on; and who, in possibly most cases, didn't have college educated parents who could help them judge the colleges they considered.....
C'mon, have a little humanity and don't blame the victims.
1
Secretary DeVos may not like the "loan forgiveness" program. That's fair. What does she propose to redress the wrong perpetrated on students of the crooked for-profit schools she champions?
10
Let me get this straight, a former dean of DeFraud University is in charge of the Borrower Defense program? The entire Administration is a complete joke.
21
So, DeVos stops processing fraud claims by students of these for profit “colleges” and appoints someone who once ran one of these institutions to process these claims. Anyone see an issue with this scenario?
10
The cons blame you for falling for their cons.
The cons want the money they defrauded you of.
The Republicans are playing both parts, the cons, and the vindictive selfrighteous punishners to see to that the cons get their money.
4
Doesn't anyone recognize the severe moral hazard here?Millions of families worked their tails off to pay student debts over decades. Now, the idea that college should somehow be "free" (NOTHING is free) is propagating, along with forgiveness (i.e.; someone else pays) for college debts. Rational people recognize that there is no quicker way to devalue a college education. Guess what? It's happening.
4
Education should certainly be in the European model where education is virtually free rather than leaving the student crushed with debt.
10
@c smith
When for-profit education is sold to kids and young adults based on promised employment prospects, and fraud has been committed in doing so, I agree that their school loans should be forgiven.
But that should not be conflated with the idea of government subsidized higher education, which is a different animal altogether.
3
@c smithThose families decades ago had almost zero college costs compared to today’s standards. College for baby boomers were heavily subsidized by the greatest generation, but when it was their turn to invest in the future they went “mememememe!” Like boomers always do
Meanwhile a whole generation of students learn what people around the world and native Americans have known for a while: never trust the United States to keep its word.
4
to all of the people here who place the blame on the students, and talk about personal responsibility etc., here are some thoughts for you. It is not unreasonable for young people in their 20's, when taking out loans that are approved by the fed government and that are marketed to them by the colleges as a good educational investment, to have trust in those institutions. The government, and educational institutions, are supposed to be working for us, not against us. The fact that you all think it is just fine for people's lives to be ruined because they trusted in institutions that are supposed to be helping them demonstrates just how broken this county is, and just how cold and cruel that can make people become. We should be working together, against this cruel and nasty administration, to ensure that both entities (educational institutions and the government) are working in our interests, not to find ways to break and take advantage of us. Sadly, they are winning, because they have managed to convince you that these poor students are the problem, rather than people like DeVos--who have more money than most of us can ever dream of, but who still want to cripple the middle and working class so that they can have more.
47
@jyounes - excellent, bravo.
5
Lost in all this, is the personal responsibility of the students and their families.
Their idea being that if you did not make bank coming out of school, you can somehow get your debt forgiven.
What about doing your research first?
If you choose a career in Liberal Arts, you cannot expect to land the 50k job any time soon, just ask any such graduate. If you chose Major on Greek Literature, you will be real hard pressed to find any one who needs your skills. You cannot Major as a Librarian and expect to make 40K on your job as a receptionist someplace.
It’s a real easy way out to then claim ‘I was lied to’ when you chose a career with no prospects for employment.
Simply put, if you do not want a 65k bill for a useless degree, then do not choose that to begin with.
I have had so many millenials apply for a job here, asking for starting salaries of 40k+ with no experience, no background or training in the industry, but Majors in Literature, Modern Art and such and huge debts they are desperate to pay. And they want to work part time, from home.
Choose well kids. Despite the lies of free schooling and a job guarantee that Ocasio-Cortez sold you, no such thing happens in real life.
6
@AutumLeaff
The root cause of students picking wrong majors and schools, is the lack of counselling for the future,
starting in 9th grade.
Many students come from broken families or families lacking intellectual resources to steer their children.
Yes, a 16 year old should feel protected by banks extending too much credit via credit cards and student loan financing.
4
We're talking about scam schools here, aren't we? Trump University being a perfect example.
13
@AutumLeaff. Actually, that’s pretty much bunk. And heaven help a society that doesn’t have people who understand critical thinking and morality the way humanists do
3
The govt has been spending $1 Billion dollars every single day since the start of 2 illegal wars, circa early 2000s; forgiving a half billion, or even a full billion or 2, is next to nothing by comparison. Stu Ln Forgiveness from predatory entities that provided fraudulent sucker-punch loans (all without the proper legal government oversight, mind you) is the right, best solution; and, it has already been made into a valid program, so any debate now is moot. These defrauded innocent people whom were once young, naive, idealistic human beings only wanting to improve themselves, absolutely need to given back their lives. The worst part [read: the real crime] here is that Trump and the GOP congress continues to appoint ‘heads’ of departments whose aims are to countermand, undermine, and run contrary to their agency’s very mission, purpose, mandates, rules & regulations—already in place, and are therefore incontrovertible. Back-stepping and slow stepping any process or program in place when they took or were given office is illegal, is nothing short of dereliction of duty, and they should be removed post haste for obstruction and emplacing hindrances to said program(s). And, it is low down dirty shame that any of “we the people” should allow or stand for such egregious idiocy. Any refutations hereto are merely orange noise, and illustrates your own willingness to subvert laws, rules, regulations for programs, as stated, ALREADY in place.
12
You should mention that 100% of these students qualify for income-based repayment plans. And since they appear to be unemployed or under-employed, their payments would likely be zero. The debt is then forgiven after a period of years, usually between 15 and 20. In the meantime their loans are reported as current to all three major credit bureaus.
2
Not true.
Student loans are not forgiven after 15 years of deferral. Not true.
4
Student loan debt is not forgiven. They will even come after your social security
5
Seems to me that the real school failure here in in K-12:
How did so many young people, with high-school degrees, make such terrible life decisions involving so much borrowed money? THAT'S what we should be addressing, and this is a teachable moment: Knowledge is Power.
11
@RR. The fact of the matter is that the US has decided higher education is irrelevant to our future. We are aiming to be the new Bangladesh: a dirt cheap source of manufacturing for the rich world
1
If these "schools" (businesses, really) bilked students, why are their assets not being sold to partially offset the loan reimbursements? And, why are investors in these operations not on the hook, as well?
31
@Robert Wood Several of these schools have had legal verdicts against them, but many then go bankrupt before paying. That's what happened with ITT: It went bankrupt, there's now very little left to pay out more than $1.5 billion in claims against it.
4
@Robert Wood In the same vein as why Wells Fargo has not been made to repay account holders who unbeknownst to them had additional ghost accounts opened that wrecked their credit and sucked additional fees. No bank is too big to fail and no banker should be so well connected as to escape jail for his or her crimes.
As for these schools, I think the government should go after the owners and those who profited from the fraud. Prison sentences and multi-million dollar fines might slow this behavior. The bankruptcy escape for these crooks is untenable when the same laws punish the student borrowers by not allowing discharge of their debts.
4
The rats have been made guardians of the cheese.
26
These colleges are junk, but so are many non-profits. Instead of reversing rules targeting for-profit junk colleges, the Education Department should be applying them also to tax-exempt junk colleges. No college that produces most incapable graduates or which admits mostly students not ready for college work should be given any federal funds. Such colleges should be closed down to save taxpayer money.
7
Good thing we starved the U.S. Treasury of resources for programs like this after the last tax cut transferred billions of dollars to wealthy corporations. Apple needed the money more than an unsophisticated person who tried to better themselves and was duped by an unscrupulous operator.
18
Business, Profits and the oportunity that Greed begats are the wheels of American Industry.
The People (or far too many of them) are what fall under those wheels so that just a few have a cushy ride to the top without too many bumps along the way.
And it is by this that the American Dream is Crushed.
6
Why am I being asked to subsidize these bad decisions. The New England Institute of Art? And you’re surprised that it might be hard to find a job? Give me a break.
Cheated? Defrauded? These loaded words hardly belong in this article.
Perhaps we should also forgive all debt(credit card, mortgages, car loans) when people made bad choices. After all, I know a guy who couldn’t pay for his Ferrari after he got it; maybe Stacy will pick up the slack.
15
@VFO
By your super-responsible standards, this is what my nephew the internist (and the 11 partners in his practice) should do when their patients make bad choices.
If you smoke, and refuse to stop, when you get a pulmonary disease, or lung cancer, they drop you as a patient. If you have high blood pressure, or angina, and refuse to change your diet and start exercising, when a crisis arrives, they drop you as a patient. If you reach a certain age and you refuse to have a colonoscopy and you develop colon cancer, they drop you as a patient. If you decline vaccinations for your child, and your child develops measles, they drop your child as a patient.
After all, bad choices are bad choices, right?
18
Actually both parties are responsible - the person who made the choice to go into debt and the institution who seems to have taken advantage of loans that are too easily available. It's unfortunate that everyone has to "take sides" instead of looking at the whole picture. This is what happened with housing - banks took advantage of people, and people took out loans they knew they couldn't afford. Both are responsible.
6
@VFO
Absolutely right.
These kids and their parents thought that Liberals Arts Major was a great choice, and now that are on the hook for 65k+ they want the tax payers to foot their bill.
If we can vote on this please, I'l make sure i vote 'no'.
4
I've sometimes wondered if the smarter way to provide student loans would be through the school itself. If the school goes bankrupt, then the debt would be written off by a bankruptcy count. If the school is convicted of fraud, then the debt would be forgiven by a criminal court. The school itself would obtain funds from a bank after demonstrating a viable business plan. The hard-nosed bankers would cull-out the fraudsters.
5
@W Yeah, well, that's not the way it works. The debt is not written off in the school's bankruptcy...it is an asset of the school, money to be collected on behalf of the school's creditors. And generally, education loans cannot be written off (discharged) in a student's bankruptcy, which would be the proper place, under current law. The schools have typically sent their students to banks, other for-profit lenders, or sometimes the Dept. of Ed (state or federal) for loans. The Feds have, in an admirable policy of wanting to expand education, been guaranteeing the loans made by private lenders. That makes the private lenders less conscious of risk, because Uncle Sugar will bail them out. That's the unintended bad consequence of a good policy, just as (as another commenter mentioned) Federally insured housing loans bailed out imprudent lenders and borrowers. Having to prove fraud in every instance is tough on the borrowers, but DeVos (who is indeed a fox in the henhouse) is not totally wrong in asserting that policy. However, when a school has demonstrated egregious and far ranging fraud, their loans should not be paid back and the Obama-era rule was likely a good one. Tough situations, and the students do need to use more judgment, not just say, "More money, yes please" without knowing the standards and status of the school that will get it.
1
@W
Your idea of forcing schools to have some skin in the student-loan game has merit, IMO. It could be a good start toward aligning "education supply" with actual "education demand" in the marketplace. But where would schools get the money from, without turning themselves into potentially dodgy financial-services organizations (e.g., GMAC, GE Capital)? A perhaps bigger potential problem: "The hard-nosed bankers would cull-out the fraudsters." That very much *didn't* work in the mortgage crisis that brought about the Great Recession.
@RR
I guess I was thinking that the banks, if they have some skin in the game, might be a way to reconcile labor supply with demand. The schools would essentially be co-signing the loan. Freshman students don't know about the labor supply, and the schools don't seem to care about labor demand.
Bankers used to be savvy about this, but with branch banking they no longer seem to care about the local economy. This may be a way for the banks to get involved with local economies again.
The mortgage crisis of 2008 was a little different. In that case the banks were nationalized by the government, and so the loans were written off. The banks aren't repeating that scenario in the U.S., though.
I would ask the NYT to please try to get a statement from Senator Marco Rubio. Senator Rubio was a deciding vote in support of the confirmation of Sec DeVos. The confirmation of Sec Devos was highly contentious due to her questionable qualifications and motives . What sticks out to me is that Sec DeVos had previously been a very large donor to the Rubio campaign.
As a Fla voter, I hold that Senator Rubio should share in a significant share of the responsibility to rectify these education issues.
Good luck getting him to answer any questions.
24
@Vince Borden This has nothing to do with de VOS. Obama's DOE only approved 15,000 forgiven loans UNTIL his last month in office. How convenient. It's not partisan, it's the fact that it never was funded, not by the Dems or Reps. Those that should be held responsible are those that had any ties whatsoever to the schools. They are the frauds and when people are defrauded in this country, they must go to court and sue; not be paid by the taxpayers.
If the GOP were interested in combating fraud, they would first have to impeach their own POTUS.
So, students, if you want some fairness, if you don't like fraud and corruption, and if you would like to have a government that believes an educated and well informed populace is the gateway to success, vote, and vote against the GOP. They are only interested in protecting frauds and grifters, and fool many by calling it "small government."
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By that logic all taxpayers will be on the hook for anytime anyone gets defrauded. A scam indeed.
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@babaganoush Can you say reductio ad absurdum? I know you can. The taxpayers are on the hook here because the Feds guaranteed to the original commercial lenders the repayment of the loans to get them to lend (an admirable project) in the first place. Most of our consumer decisions are not federally guaranteed. So no, that's not happening.
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Didn't Trump himself run a sham university subject to multiple lawsuits? Why would we expect his administration to take student loan forgiveness for fraudulent programs seriously?
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Trump university students put their tuition on their credit cards because his school was never an accredited institution. This is not that
These for profit schools are accredited but shouldn’t be- when the government demands quality the number of eligible institutions decrease and then donors scream for leniency which is what happened here
Trump voters being taken advantage of by Trump appointees.
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As sad as over promising jobs after graduation - it is nothing new and not limited to what are called "for profit" schools. The University of Missouri School of Journalism touted "three job offers for each graduate" when i attended...and, only later, it was discovered to be something of a hype , if not a sham. Half my class did not have any decent job offers...unless one considers the job offers for newspaper delivery routes (if you provided your own transportation) in small Missouri town. I did, actually. aspire to be a delivery boy on my bicycle, but that was went I was 5 years old.
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Ms. DeVos is another willfully dishonest member of the Trump administration; she is profiting directly and indirectly from the misfortunes of defrauded students. She should not be involved with anything having to do with education.
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If she'd acquired the same degree in Art at Yale, even for free, she'd have been equally defrauded.
Yeah, we should definitely be in the business of bailing out every young person who doesn't know what to do with their life.
Good luck America.
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If the government is going to be on the hook for a flood of forgiven student loans then it needs to be far more restrictive in the schools for which students qualify to receive such student loans. There's too much moral hazard in freely allowing students to borrow to fund spending on unvetted schools then relieving them of the requirement to repay their loans and sticking taxpayers with the losses.
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From the very beginning, Ms. DeVos has demonstrated her lack of knowledge about public education and her antipathy toward students. Now she is harming students who unwittingly went to school at places that didn't give them a decent education.
When a person tells you who she is, believe her.
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The poor track record of for profit colleges calls for an immediate cessation of federally-back student loans for tuition payments at these institutions. Likely, the for-profit higher educational sector will cease to exist. Arguably, these institutions were established only because of the access to easy money from the federal government. The for-profit administrators and shareholders know that to access the spigot of government money they need only dupe the naive. Time for this con to end.
The government made a huge mistake by allowing funds to be used at these institutions. It needs to own up to it - forgive for-profit student debt and go after the institutions and principal actors engaged in fraud.
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@Noname The Democrats did it because they believed everyone deserves to go to college. It was supposed to allow people to get a college degree without ever really going to college.
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...it's so sad; hundreds of thousands of people, many of them young, burdened with loans they cannot repay.
It's a crime, committed by the US Government.
The students should be able to extinguish the debt if they cannot afford to repay it.
But more importantly, the Student Loan Program guaranteed by the Federal Government needs to be abolished. You don't lend money to borrowers who don't have the capacity to repay the loans.
The US government instead should provide grants - which are not repaid - grants based on need - let those same students attend colleges - for profit and otherwise - they must maintain required grade point averages and hours of classes to keep the grants.
Stop student lending - if parents are able to take out loans for their children, that's fine. But students should not be allowed to borrow money to go to school. The government should provide funding for children who don't have the income to pay for college.
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Guess who can't stand the Consumer Financial Protection Bureau that has returned over $12 billion to ripped off Americans from banks ?
Guess who has been working full time to gut the Consumer Financial Protection Bureau the CFPB, which "has curtailed abusive debt collection practices, reformed mortgage lending, publicized and investigated hundreds of thousands of complaints from aggrieved customers of financial institutions, and extracted nearly $12 billion for 29 million consumers in refunds and canceled debts." ?
The Greed Over People party.
The Reverse Robin Hood party.
The Robber Baron party.
The Grand Old Phony party.
The Republican party.
How is an honest fake, phony. fraudulent Republican supposed to make an obscene, amoral profit and he can't rip off the vast majority of Americans with zero federal oversight.
Welcome to the Trump-GOP criminal syndicate.
The 'law and order' Republicans demand the unchallenged right to steal.
Nice GOPeople.
"Let us prey"
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"Free money give away for who?" It would appear the "for profit" schools and their investors were the ones that got the money. Betsy DeVos is just another one of trump's unqualified grifters, in over her head.Ultimately the US Senate bears a major share of the blame for her being in that position. They confirmed her nomination. In essence the US government assumed responsibility for the veracity of these institutions by granting loans for attendance at them in the first place. The institutions failed and the government failed by allowing the loans to happen. The Government should eat the cost of those loans and recover what it can from the failed institutions with clawbacks from investors like DeVos.
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@John Warnock - Here here, bravo. A class action suit against these fraudulent entities, one wherein an investigation ‘follows the money’ and recovers student and govt losses, as well as holds to account the fraudsters whom knew exactly what they were doing with their false representations, their mis- & dis- information schemes, and their false promises to the young hopefuls that were once their young, hopeful students whom entered their programs in good faith, but instead were duped in the worst way possible.
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@John Warnock But, 99% of these debts and 'bad' schools occurred and failed long before Trump. As a matter of fact, the Congress under the Dems in 2010 and 2011 approved these schools and allowed them to operate. They approved the high interest rates, the real issue with student debt, to an unreal level. 8.5%!!! When the interest rates for mortgages and cars (private sector banks) were falling towards 1%. Anyone ever, ever actually look at the whole picture, history, and the players involved?
Where is the personal responsibility for people who chose to go to a college based on tv ads? Why should we the people have to pick up the tab?
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Don’t you understand? Fraud. Are we expected to understand that everyone lies?
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What about the personal responsibility of the people who run the fake schools? What about the personal responsibility of the bankers that approved the loans? What about the personal responsibility of billionaire Betsy DeVos who protects Trump University style fake schools who put people into bankruptcy? Steve do you want America to be run by a mafia of criminals and grifters where victims of fraud are told to pay up or die?
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@Steve Because we the people, through our government, signaled the fraudulent 'colleges' were legitimate by allowing loans to be made. There needed to be oversight and as far as I know, the GOP is not big on taking care of legitimate business of enforcing laws against fraud.. and certainly not graft as evidenced by their support of Trump and his family, who are making money hand over fist by selling influence and access to POTUS.
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To be clear, the students borrowed the money from the federal government to pay tuition and fees at what were, at best, questionable "educational institutions." The institutions' tuition and fees where paid by the students but they got little in value in return. Those institutions have now closed down (and therefore can't be successfully sued for fraud) and the Department of Education is being asked to either waive or reduce the repayment of these federal loans because the students were defrauded by those closed "educational institutions." The only real question is do the taxpayers or the students absorb the losses since the thieves and money are long gone. The argument is that the Department of Education should never have approved these loans in the first place and therefore the students shouldn't have to pay back the loans, but the students - mostly over the age of 18 and therefore adults - did take out the loans. Proof of two old cliches - The road to h-ll is lined with good intentions" and "a fool and his money are soon parted". etions us eo
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@PF59 —. As for taxpayer money, most people pay very little if any taxes, and probably less than they should, it’s not your/my money, and it never was. Besides, backroom deals to prop up crooked too big to fail financial institutions were good enough in 2008-09; why not bail out these American citizens who’ve been horribly defrauded by heinous schemes and poor to no govt oversight loans. Put these good citizens back on track to being able to move forward with their lives, e.g., buy a home, start a family, work and pay taxes... in that light, this Stu Ln Forgiveness prgm IS AN INVESTMENT, and not an expense. And, let the attorney general, the IRS, and the GAO go after the fraudsters, seize their assets, and recover your/our precious tax dollars; it’s not said defrauded students’ nor your responsibility to pick up the pieces.
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I know this may or may not come as a shock to people but the student loan forgiveness program is and was a sham.
It was never intended to work fiscally or was it viable by our government already wallowing in debt. The outstanding unfunded liabilities of Medicare, Medicaid, and Social Security in their own right would prevent such a program from coming to fruition.
The principal of the loan forgiveness was to attract younger voters to the Democratic party. To date no one has been through the process nor had their loans forgiven aside from death.
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@Indie Voter The purpose of the program was to provide educational assistance in the face of declining assistance for higher education by increasingly GOP controlled state governments. For profit institutions took advantage of the program and the students. Medicare, Medicaid, and Social Security funding have nothing to do with this program. In fact funding for Medicare and Social Security are separate and distinct from the Federal Budget.
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@John Warnock I think the point is that NO GOVERNMENT program that seeks to 're-engineering' society ends up with unintended consequences and worse. Always. This is one reason why some like clear, simple, straightforward laws and less bureaucracy. It would seem that you thought 'nice' programs would be used for 'nice' assistance for those in need? Frankly, the Democrats failed on this 'project' that believes everyone deserves to go to college. They don't, most are not ready after high school and <50% even like school. Heck, 25% of incoming freshmen require remedial classes or assistance! Our school system k-12 has been destroyed by progressive 'adjustments' from the DOE over the last 30 years. The Dems are on the hook for this one.