By J. Coyden Palmer, Chicago Crusader
Illinois has been one of the leading states assisting students victimized by unscrupulous for-profit colleges and universities, leaving them in serious debt and with useless degrees. That is why Illinois Attorney General Lisa Madigan and 18 other state Attorneys General are suing U.S. Education Secretary Betsy DeVos after the Trump administration rescinded rules put in place by the previous administration to protect students nationwide.
The suit, filed earlier this month in Washington, D.C., claims DeVos violated rule-making laws when she announced a decision to stop the so-called borrower defense to repayment rules back in June. Critics argue this is just another attempt by the Trump administration to dismantle something done by Obama.
“Students should not have to pay for student loans they obtained to attend fraudulent schools that promised education and training that they did not provide,” Madigan told the Crusader earlier this week. “They are putting priority on the for-profit organizations and it is allowing them to target poor people who are trying to better themselves and take care of their families. But you now have an administration that simply does not care about people.”
The rules developed by the Obama administration allowed for students to sue unscrupulous colleges and have their federal loans erased when the schools were found to be in the wrong. In Illinois, Madigan successfully shut down Westwood College last year. The school was under investigation at the time of its closing for accreditation and loan fraud. Westwood was not regionally accredited in November of 2015 when Madigan first sued the school. She reached an agreement with Westwood that gave many former students $15 million in compensation to be applied to loans taken out by students.
“It all came about through students and former students who started complaining to our office a number of years ago about exorbitant costs, poorly accredited programs and a failure to get a job in the field their degree was in,” Madigan said. “It will be a credit to their account so any outstanding balance will be erased, and any mention of it on your credit report. It will be erased by Westwood at Westwood’s expense.”
Madigan said the accreditation process for many of these schools was simply to get other like schools to sign off on them. She said it was like a private club where everyone watched out for everyone else. But by doing that, students were the ones who received the short end of the stick.
“President Trump was the person behind Trump University, which was an entity that was found to be fraudulent,” Madigan said. “Many of these schools that have been operating, we’ve been able to put out of business here in Illinois. But now we have a new group of people who are running the country and everyone should be concerned. They are putting in place people who used to work for these terrible for-profit institutions and they have decided the profits of these universities are more important than Americans getting a quality education. It’s an absolute disgrace.”
Madigan explained that victims of these schools were put in a financial bind that could affect them for years. She said having high loans but not being able to get a job in the field they went to school for, ruined the credit of many students when they defaulted on the loan. She said the bad credit rating would not allow people to buy a car, purchase a home, get married, start a family, nor gain access to credit cards or other functional adult activities.
“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” said Massachusetts Attorney General Maura Healey in a state- ment emailed to the Crusader. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law. We call on Secretary DeVos and the U.S. Department of Education to restore these rules immediately.” Healey filed the lawsuit and was joined by Madigan and other Attorneys General. In Healey’s state, Corinthian College was shutdown for similar reasons as Westwood. When it closed in 2015 it left the 16,000 students enrolled at the time in limbo.
DeVos announced she was also suspending the new “gainful-employment” rule, also put in place by the Obama administration. It was supposed to take effect on July 1 and would have stopped federal funding to career programs that consistently left students with more debt than they could afford. Many of those who attend for-profit colleges are seeking jobs as security guards and medical assistants.
Last year a study by Stephanie Riegg Cellini of the Trachtenberg School of Public Policy and Public Administration at George Washington University and Nicholas Turner of the Office of Tax Analysis at the U.S. Department of the Treasury, found that students who enroll in certificate, associate and bachelor’s programs at for-profit colleges and universities generally see a decline in earnings (and typically greater debt) five or six years after attendance, compared to their earnings before enrollment.
