Betsy DeVos, secretary of education in U.S. President Donald Trump’s cabinet, on Wednesday proposed restricting forgiveness of loans for students defrauded by for-profit colleges.
The Obama administration passed a law that helped such students, recognizing the huge debt burdening a whole generation of young people for years to come, and trying to stop the fraudulent schemes that led students into economic distress. According to the new proposal, defrauded students will have to show that they are in insoluble economic difficulty or that the fraud was committed with malicious intent. Two colleges that collapsed in 2015 and 2015 left many students with heavy loans and no degree. They were convicted of misleading students, false advertising and making false claims.
DeVos is toeing the Trump administration’s line, upending all the policies of the Obama administration. In this case, the previous administration advocated forgiveness of hundreds of millions of dollars of accumulated debt, and new oversight regulations against institutions working to defraud their clients.
DeVos wants to save the administration about 700 million dollars a year this way, and the new regulations will go into effect in July 2019. DeVos’ reasoning is that the institutions which commit the crimes should have to bear its cost, not the taxpayers. However, critics say DeVos’ new rules will make it more difficult for students to obtain government loans and they will help guilty colleges evade responsibility for their actions.
DeVos’ appointment as secretary of education was controversial from the outset. Some of her first steps in office were strange – for example stating that her true goal was to abolish the need for an Education Department altogether, public clashes with teachers and schools, and declaring that it was a good idea to arm students, because in places like Alaska this could ward off bears.
These curious statements aside, DeVos is a very problematic choice for heading a government department so crucial for molding the future of the United States. DeVos is a billionaire, the daughter of the founder of an auto parts corporation, Edgar Prince, and married to billionaire businessman Dick DeVos, who made his fortune as a founder of the multi-level marketing company Amway, which was convicted of running pyramid schemes.
Before DeVos became education secretary, she was active in three main fields: philanthropy, donating to the Republican Party, and promoting for-profit education through more private schools, that is, charter schools that are publicly funded.
DeVos appointed for-profit education figures to senior posts in the Education Department, including a few who had worked at companies that were sued and paid compensation for illegal actions in the for-profit education market, and worked to release private education from regulatory oversight.
The dispute over charter schools and vouchers – two methods that bring ownership of schools into private hands and that DeVos supports, is far from over. Those in favor say privatization makes for streamlining of resources in education. Some of the charter schools were established by interested parties, such as parents in neighborhoods where schools are weak. Some show better results in comparative exams and student satisfaction
Opponents of the system say attempts by the United States and Sweden to implement these methods do not produce better average results and lead to greater economic and social gaps. Among the cases that spotlighted the problems in U.S. charter schools were those backed by corporations that used public funds to invest in complex real estate deals instead of teachers and students. Other networks were investigated for questionable accounting methods, and in others, discrimination was found against students with disabilities, who increase the costs of the corporation running the school and are thus unwanted.
Alongside the dispute over methods of privatization, the transformation of funding student loans into a huge and prosperous business has created a major problem. This market has an inherent failing, which explains the growing mountain of student debt in the United States. A whole generation has entered a financial hole that it cannot climb out of, and some experts say this could be the root of one of the greatest financial crises the United States has seen.
Still, blaming DeVos and the Trump administration for problems in the U.S. education system would be widely missing the mark. For decades, higher education in the United States has become less accessible and has continually widened gaps among the citizens of the largest economy in the world.
The average tuition today in a four-year college leading to a standard bachelor’s degree in the United States is $26,000 a year. In private colleges the average is nearly $40,000 a year, and in public colleges the average reaches $20,000 a year. From 1986 to 2016, tuition in the United States rose in real terms from $12,000 a year to $26,000 a year.
Tuition incudes room and board. But even so, tuition in a public college is the highest in the world according to OECD numbers. In some countries, tuition in public colleges is free.
In recent months Trump has been working to stop China from growing stronger by imposing tariffs and restricting access to American technology. Trump says that unfair trade and stealing of intellectual property is the greatest threat to the United States. But the United States has its own internal weakness in the area of education. Its rating in the international PISA tests in math fell from 30 to 40 in 2015, which is under the OECD average and under that of Israel, which once trailed it. In reading, the United States fell from 16 to 24 in the PISA tests.
In a world where workers have to compete with computers, robots and technological giants like China with the help of skills and higher education, an academic degree is increasingly farther from the reach of many Americans. To obtain higher education they are mortgaging their future; 44 million Americans owe $1.5 trillion on their student tuition loans. A quarter of American adults are paying off such debts, with an average debt of $37,000 when they graduate, as of late 2017, compared to $20,000 in 2004. If Trump wants to beat China, one of the first places to start is in his own Department of Education.
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