The Hypocrisy of the War on Betsy DeVos.
The Hypocrisy of the War on Betsy DeVos.
By Michael Fryar
As of today, 18 states attorneys have filed lawsuits against Betsy Devos over the delay of the Department of Education over implementation of the “borrower defense to repayment” regulations. These regulations are protect student loan borrowers from misleading, deceitful, and predatory practices by institutions who participate in, among other things, Title IV aid programs.
The complaint filed by the Massachusetts Attorney General contains this specific complaint:
“Some predatory schools, generally concentrated in the for-profit college industry, …often have more students that drop out than graduate and leave students with significantly more debt than other schools. The exponential growth of the for-profit sector has left millions of former students with unmanageable student loan debt borrowed in service of a credential they were not able to obtain or that provides little or no value.” But couldn't the exact same statement be made with regard to state colleges and institutions? We may never know precisely because Massachusetts, along with the other 17 states who have filed, have public institutions that are exempted from the same standard that applies to for-profit schools.
Long have state education institutions dodged the tricky question of post-secondary employment by hiding behind the veil that college education is not for job preparation but for intellectual enlightenment. This prevents the schools, states, or their accreditors from having to do such calculations as “gainful employment” or be subject to the “borrower defense to repayment” regulations themselves.No mistaking, it is a class war. A war of giant, wealthy public institutions who receive state and federal funding on smaller private schools who attempt to carve out a living without support. Of those who choose a career and living over intellectual pursuits with no guarantee of employment. It is a war of poor and wealthy, those that seek employment and those with the luxury of indebting themselves for the sake of intellectual pursuit.
According to Mark Kantrowitz, one of the Nations leading student financial aid experts, “…student loan debt at graduation should be considered affordable if the monthly loan payments assuming a 10‐year repayment term are less than 10 percent of gross monthly income …. The student loan payments will still be affordable, but more of a financial stretch for the borrower, if the payments are less than 15 percent of gross monthly income.” (Mark Kantrowitz http://www.studentaidpolicy.
Kantrowitz, in a 2015 article for Time.com noted “If we look only at students who borrow to attend college, it appears that more than a quarter (27.2%) of them are graduating with excessive debt (http://time.com/money/
But because public colleges and universities are not held to the same standard as for profit schools, the situation may be even worse. There are no direct report surveys or requirements to track students debt and income as in for-profit schools. And it appears that the Attorney Generals of these states, while on high horses when it comes to attacking for-profit schools, are notably silent when it comes to protecting students at their own state institutions.
It seems to me it is not so simple as this discussion implies. Having worked as an auditor consultant and financial aid administrator the sword cuts both ways. The Feds dissalow packaging to direct costs, many career schools are caught by students who never intend to repay and are stipend chasing. Thirdly career schools disproportionately serve at risk populations meaning there is a higher likelyhood of default. If the feds want the default rates to go down and want to hold schools accountable why not allow schools to package to direct costs and give the quality career schools a chance at succeeding at controlling default. And yes let the standards apply fairly across the board...
ReplyDeleteSTEVE t- I appreciate your insight to Michael's post and giving a different point of view. Yes-there is a large problem with the stipend chase, packaging students for just the cost would have a direct impact on how students pay for school or support their outside cost while they are in school. However, when you state fairly across the board are you referring to for-profit and non-profit?
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