Why Biden’s student loan relief efforts haven’t changed a DeVos decision on for-profit colleges so far

Why Biden's student loan relief efforts haven't changed a DeVos decision on for-profit colleges so far
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The rule was overturned by former Education Secretary Betsy DeVos, who was later sued over the decision. Biden administration I asked a judge late last year to keep the revocation in effect while he went through the months-long process of writing a new version.

It’s her move Surprised some student loan Borrower advocates.

“If the Biden administration As serious as it is to protect students, it doesn’t make sense for them to continue their fight in court, Aaron Ament, president of the National Student Legal Defense Network, which filed the suit in 2020, said.

“They can help now, all they have to do is stop defending Betsy DeVos’ illegal decisions,” added Amin, who previously served as an attorney for the US Department of Education under the Obama administration.

For-profit colleges have helped fuel America’s student debt problems. About 11% of for-profit college students default, compared to 7% of students at public colleges and about 5% at private nonprofit colleges, according to the latest data from the Department of Education.

Many for-profit programs do not lead to higher paying jobs, which leaves some students struggling to pay their debts. The Ministry of Education has found that many for-profit schools have taken over their students, and as a result it has done so Writing off the debts of thousands of these borrowers — a move that provides debt relief but also costs taxpayers money.

The rule, known as “profitable business,” is intended to identify low-performing for-profit colleges and degree programs at non-profit colleges — meaning those whose graduates have received high student loan payments relative to their income. Those who did not adhere to government standards would lose access to federal funding. As a result, their students will be prohibited from borrowing federal student loans and receiving other types of federal financial aid.

DeVos scrapped the rule in 2019, arguing that it failed to account for factors that could affect alumni earnings other than program quality. She also criticized the rule of establishing for-profit colleges at a higher level than non-profit institutions.

The Biden administration wants to rewrite the rule

The Ministry of Education intends to put in place a new rule that sets standards around gainful employment. In order to do so, they would begin a formal rule-making process as soon as next week. The process, known as negotiated rule-making, involves a series of meetings followed by a public comment period that typically takes months.

“We are committed to restoring a strong, profitable employment base as quickly as possible,” Undersecretary for Education James Cavale said in a statement sent to CNN.

Added Kaval, who played an important role in writing the first Rule of Profitable Business.

But while the department is going through a rule-making process, the protection of students stipulated in the previous lucrative recruitment regulation It wouldn’t be in place, allowing people to potentially enroll in risky college programs in the meantime.

In a court document, Kaval said that, from an operations perspective, it would likely take at least a year, if not longer, to fully implement the previous rule. He wrote that it was unclear whether this could happen before a new rule became effective.

If the previous rule is brought back, the department expects it will have to fight new lawsuits, according to court documents.

Targeting for-profit colleges

Other actions by the Biden administration have indicated that it intends to target the for-profit college sector. For example, the Federal Trade Commission sent a letter to 70 for-profit colleges in October, alerting them that the agency plans to eliminate any false promises they make about their graduate jobs and earnings prospects.
In addition, a Biden-backed plan to expand Pell Scholarships — a type of federal aid awarded to students with exceptional financial needs. It would make for-profit college students ineligible for the money. The plan was included in Democrats’ Building Back Better legislation, which stalled in the Senate.

“I think it’s a priority for them, but I think they can do more. It was a bit surprising that they didn’t put paid work back into action,” said Caroline Fast, an attorney and senior fellow at the Century Foundation. Where she works on higher education policy.

“The timeline for putting a new rule in place is very long. And it seems logical to have the old rule in place in the meantime to make sure students aren’t enrolled in programs that won’t meet the standards,” she said.

How was the intent of the base to operate

The Profitable Employment Rule requires for-profit colleges and professional degree programs at nonprofit colleges to publish debt-to-earnings ratios, proving that their students can find well-paying jobs upon graduation. If the average percentage does not meet government standards for two out of every three consecutive years, the school’s federal funding will be cancelled.

The assessments were published in 2017, and found more than 800 programs that failed to meet the department’s standards. But DeVos rescinded the rule before any of the institutions lost federal funding.

Al-Qaeda still has some influence by exposing programs whose students have debts they cannot afford. For example, a graduate theater program at Harvard University has frozen enrollment after receiving a failing grade on a government report.

Debt Cancellation vs. Addressing College Affordability

So far, the Biden administration has canceled about $ 2.8 billion in student loan debt owed by students who have been defrauded by their for-profit colleges, according to the Department of Education. It did so by reversing a DeVos policy that limited the amount of forgiveness due to fraudulent borrowers and determining that 115,000 former students at ITT Polytechnic, a now-defunct for-profit institution, were eligible for automatic forgiveness.

But these actions only provide relief after defrauding someone. The Rule of Profitable Employment attempts to prevent the problem from happening in the first place, and to protect students from borrowing from debt that they will not be able to repay.

“Instead of getting rid of problems at the back end, they can clean things up at the front end as well, and save a lot of people from the heartache,” Fast said.


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