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Collecting debt from defrauded students fits right into Betsy DeVos’s ideology

This is only the latest action that shows her disregard for protecting students and taxpayers.

Education Secretary Betsy DeVos at a Cabinet meeting last week. (Pablo Martinez Monsivais/AP)
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Last week, a federal court held Education Secretary Betsy DeVos in contempt for continuing to collect debt from people defrauded by for-profit colleges in violation of a court order.

Under the Obama administration, the federal government had released students from their obligation to repay these loans. Investigations by the Education Department and the Consumer Financial Protection Bureau revealed unsavory practices such as falsifying graduation rates and post-graduation employment figures, corroborating allegations raised by class-action lawsuits against ITT Tech and Corinthian Colleges. The rationale then was that fraudulent providers had duped students out of their educations and savings, and they should not be expected to pay down debt that had bought them nothing.

But when DeVos assumed office, the Education Department stopped reviewing debt-relief claims made by defrauded students. In fact, it promptly resumed collecting debts that should have been forgiven, in some cases garnishing wages and seizing tax refunds. The new rationale seems to be that for-profit companies and lenders are the ones that need the department’s aid. Students, on the other hand, require tough lessons in taking responsibility for debt — even if they incurred it through worthless courses at predatory colleges.

Last week’s ruling forced the department to admit wrongdoing. But its actions were not an accident or oversight — abetting the exploitation of our nation’s most vulnerable students goes to the very core of DeVos’s vision for education.

DeVos has made clear that she believes education companies should operate with minimal regulation or guidance from the government. “If it’s the right fit for the student, then it’s the right education,” she said in 2018. A year earlier, she drew an analogy between public education and the regulated taxi business, suggesting that “if you think ride-sharing is the best option for you, the government shouldn’t get in your way.” In short, DeVos sees the future of education as one that should be determined by markets and the private sector — a future in which students are consumers and education is the product. From this vantage, the federal government has no more business interfering in education than it does in coming between coffee drinkers and their Starbucks orders.

But education is different from other consumer products. Consumers can easily render quick judgment on what economists call “experience goods” — consumables such as soda or blue jeans. You know immediately whether you like the taste of Diet Coke or the fit of Levi’s 501s. But education reveals its quality only over time — it’s what economists call a “credence good.” This leaves students extremely vulnerable to marketing, since most cannot gauge the quality of a school without actually attending it.

Five myths about student debt

And choosing a bad school comes with heavy costs, particularly for financially vulnerable students. There’s the financial element: The average student graduates with nearly $30,000 in debt, and such loans cannot be discharged through bankruptcy. Then there’s the investment that they can never hope to recoup: time. The average student takes more than four years to earn a bachelor’s degree, and students are unlikely to ever repeat their college educations, even if they were financially compensated after being defrauded. Advocates of deregulation tend to overlook these long-term consequences.

DeVos’s philosophy about protecting students — which is at best laissez-faire and at worst intentionally negligent — also manifests in her actions toward accreditation agencies. These outfits supposedly exist to help people determine a school’s quality, but many of them have been co-opted by industry insiders. The Obama administration tried to shut down the worst offender, the Accrediting Council for Independent Colleges and Schools, which is led by for-profit leaders. Far from acting as an outside check on these institutions, it has long shirked its duty in holding for-profit schools accountable. Upon assuming office, DeVos promptly revived it.

The student loan lawsuit is only the latest action that reveals her disregard for student welfare. DeVos stocked the department with insiders from the for-profit college industry such as Robert Eitel and Diane Auer Jones. (Within 24 hours of her confirmation as secretary, she hired lobbyist Taylor Hansen as a special adviser, and he, in turn, wasted no time in campaigning against gainful-employment rules that cut off federal loans to schools whose graduates did not earn enough to pay them off.) She then shut down her agency’s special unit dedicated to investigating predatory practices. Not long after, the chairman of the House Education Committee accused DeVos of attempting to fire her own inspector general, Sandra Bruce, for investigating DeVos’s deregulation of the for-profit sector.

What all this suggests is that, for DeVos, ideology trumps the law of the land. Under her leadership, the Education Department has withdrawn from its watchdog role and become an enabler of private industry’s worst practices. Supporting free markets has taken precedence over protecting students and taxpayers.

Read more:

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