Student Borrower Survival Kit for the Trump-DeVos Era

Fall is upon us, and millions of students are ready to pick up their pursuit of higher education. Many are no doubt as anxious as they are excited. ‘Will I get along with my roommate?’ ‘Did I pick the right classes?’ ‘Will I be able to balance study with extracurriculars?’

There’s enough to worry about without leaders in Washington making decisions that add to students’ debt loads or lead them to a poor-quality education. But that’s the reality many students are finding themselves in under the Trump administration, which has systematically allowed the for-profit college and student loan servicer industries to dictate their ‘profits first, students last’ agenda.

It all started when President Trump picked an out-of-touch, right-wing billionaire with zero direct higher education experience to be his Education Secretary, for no other apparent reason than she was a Republican mega-donor. When Betsy DeVos took the post, she surrounded herself not with experienced educators, but with former executives from the for-profit college and student servicer industries. If the proposals she’s advanced during her tenure seem like they were written by and for these industries, it’s because they were.

DeVos wasted no time rolling back key consumer protections for student loan borrowers from shady servicer behavior, tried to shut down state efforts to hold student loan companies accountable for cheating borrowers, and refused to take any meaningful action against servicers like Navient when caught pushing borrowers towards higher cost repayment plans. The Secretary has even stopped her Department from cooperating with the Trump CFPB to root out student loan fraud. DeVos hasn’t lifted a finger to address the $1.6 trillion student debt loan crisis. Worse, she’s put a strangle hold on meaningful efforts that were already underway to give students some relief.

One DeVos decision after another has come on the backs of students. But as they say, ‘Knowledge is power’.  Here are some tips for what students headed back to school or preparing to enter the workforce should watch out for in the Trump-DeVos era:

  • Cross Every ‘t’ and Dot Every ‘i’ If Applying for Public Student Loan Forgiveness. The Public Student Loan Forgiveness program was created in 2007 with strong bipartisan support. That’s because it made a lot sense for the government to forgive federal student loans for those who pursue careers that may not pay the best, but are a benefit to the community, like a fire fighter, teacher, nurse, or public defender. The bar to qualify wasn’t meant to be high: just keep up with loan payments for 10 years while working for the government or a nonprofit. Unfortunately, the program has matured for many Americans on the watch of Secretary DeVos, who apparently thinks public service and keeping the government’s promises is for the birds. The Trump administration’s proposed FY18, FY19, and FY20 budgets tried to end the PSLF program, but when they failed the dismantle it outright, DeVos has made it as hard as possible to qualify for it. Through 2018, DeVos’ Education Department approved less than 300 borrowers for public service loan forgiveness among nearly 40,000 applicants – a 99% rejection rate.Thousands of nurses, firefighters, teachers, and other professionals who were promised forgiveness after a repayment period are now facing the prospect of having to pay back the full balance of their student loans on a limited income. The administration is clearly looking for any and every excuse to deny students the relief they deserve for their sacrifices.
    • TAKE ACTION: If you’ve already applied or are thinking about applying for PSLF, read as much as you can about the experiences of borrowers who have already been tripped up by the process to help avoid the same pitfalls, and refer to compliance checklists by student loan experts. You can also urge your representatives in Congress to immediately pass legislation that would close many of the loopholes the administration is exploiting to reject applications.
  • Think Long and Hard Before Enrolling in Colleges DeVos’ Team Brought Back from the Dead. The borrower defense rule is an important Obama-era protection that gives students who have been misled or cheated out of a quality education the option to seek out federal student loan forgiveness. So, of course, Secretary DeVos came gunning for it, announcing in 2017 that her department would “rewrite” these regulations. 6 months into her tenure, DeVos’ Department hadn’t approved a single application for loan forgiveness by defrauded borrowers – even as 15,000 new applications flooded in during that time. Six months after that, DeVos slashed the number of staff working on borrower defense claims. When DeVos eventually rolled out her plans to rewrite the rule, it called for a $13 billion reduction in the amount of relief awarded to defrauded students over the next decade. Adding insult to injury, DeVos’ department repealed another Obama-era regulation, the Gainful Employment rule, that was designed to stop student aid money from going to colleges whose graduates could not find good-paying jobs. This move is estimated to cost the federal government $6.2 billion over 10 years.Meanwhile, Devos’ Department has worked overtime to ensure that troubled college accreditors with histories of shortchanging students can still give schools access to federal financial aid, even if the schools have shown problems. DeVos is creating a perfect storm: taking steps to lower accreditation standards, so more and more for-profit colleges of highly questionable quality can get access to federal financial aid, while students have fewer and fewer protections and options for restitution if those schools fail to deliver a quality education. This concentrated effort to remove oversight of the for-profit college and accreditation industries paved the way for the recent disaster that left thousands of students out of their tuition money with no degree to show for it. One of DeVos’ top lieutenants, a former for-profit college industry lobbyist, “pulled strings” to allow a Los Angeles Megachurch with no experience in higher education to purchase a chain of failing for-profit trade schools. When they inevitably folded, students were left out in the cold.
    • TAKE ACTION: When you’re researching potential colleges, review the government’s ‘College Scorecard’ created during the Obama administration for info and stats on how other students from these institutions have fared after graduation.
  • Pray you never have to deal with ‘customer service’ from student loan servicers like Navient. Earlier this year, the Education Department’s Inspector General’s Office issued a scathing report revealing the department’s student loan arm, the Office of Federal Student Aid (FSA), failed to properly oversee all nine student loan servicers that handle the accounts of over 42 million federal student loan borrowers. The audit directly contradicted the Trump administration’s arguments that borrowers receive excellent customer service and protection from substandard practices, stating the FSA is “not holding servicers accountable…[giving] the impression that it is not concerned with servicer noncompliance with Federal loan servicing requirements, including protecting borrowers’ rights.” The IG even went so far as to state that basic requirements for forbearances, deferments, and income-based repayment weren’t being relayed to borrowers in more than 61% of the FSA-reviewed cases. The reported abuses and potential fraud committed by student loan servicers like Navient and Nelnet are being roundly ignored under DeVos. No oversight means servicers have no incentive to treat student borrowers with respect or deal with them honestly.
    • WHAT TO DO: If you feel as if you’ve been mistreated by your loan servicer, file a complaint with the Consumer Financial Protection Bureau, and it wouldn’t hurt to also tell your Representatives in Congress about it. You have a much better chance of having your problem taken seriously than from DeVos’ crew of industry insiders.

We’ll say this about Secretary DeVos. When it comes to leaving things in worse shape than she found them, she gets an ‘A’ for effort.

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