Investigative writer David Dayen, writing in “The New Republic” describes the variety of ways that Secretary of Education Betsy DeVos is protecting predatory for-profit “colleges” while allowing them to stiff the students they cheated.
“Imagine a car dealer sold you a lemon. You sue to get your money back. But the judge discovers that you managed to get yourself around most of the time, despite the bum vehicle. You only missed 10 percent of your appointments, so the judge orders that you are entitled to 10 percent of the price of the car.
“That’s essentially what Education Secretary Betsy DeVos announced last week for students defrauded by for-profit chain Corinthian Colleges. Victims of the corrupt diploma mill will not have their student loans discharged; instead, they will get a portion of relief based on their current income. The more professional ingenuity they showed despite being defrauded by Corinthian, the less money they will get in restitution.
“It’s yet another way in which DeVos has acted in favor of the for-profit college industry, which was left for dead after several major companies’ deceptive schemes finally caught up with them. Not only is DeVos shielding the industry from the consequences of those misdeeds, she’s rewriting the rules to legalize those practices.
“Corinthian targeted single mothers and returning veterans with high-pressure recruitment, lying about job placement statistics to make enrollment seem like a good bet. Once signed up, Corinthian would pile on tens of thousands of dollars of unanticipated debt and deliver a substandard educational experience. One student alleged that some final exams involved board games and that he got course credit from an “internship” working at a fast-food restaurant. In the end, the useless degrees did not help, and sometimes even hurt, graduates’ job prospects.
“Corinthian shut down in April 2015, after the Education Department fined it $30 million for misrepresenting job placement rates. State and federal regulators eventually won billions in fraud judgments against the bankrupt firm.
“A coalition of students refused to pay their debts to Corinthian, citing a clause in their loan contracts allowing “defense to repayment” if they were defrauded. Even under Obama, the Education Department made loan relief unnecessarily burdensome, forcing students to prove the fraud instead of instituting blanket relief. Thousands of cases were left to DeVos to adjudicate, delaying forgiveness of billions of dollars.
“And DeVos did almost nothing about them. In the final year of the Obama administration, 27,986 of 46,274 debt cancellation claims were dealt with; in the first several months under DeVos, only two claims were addressed—and both were denied. By early December, the backlog had grown to 95,000 unprocessed claims, mostly from Corinthian students. Interest accrued on the loans while students waited in limbo for a ruling. The Education Department even used debt collectors to garnish wages and seize tax refunds on some borrowers. Several state attorneys general sued the department to deal with the backlog.
“DeVos finally announced a resolution last week, approving 12,900 “defense to repayment” applications and denying 8,600 others. But the new relief plan was noteworthy. The Education Department will now compare the earnings of an applicant for debt relief to the average earnings of students who took similar vocational courses. So if you trained at Corinthian as a medical technician, the agency will look at your salary compared to other medical technicians, and deliver relief on a sliding scale. Students making 50 percent of the average rate of their program will get 50 percent of their debt cancelled; those making 60 percent will get 40 percent cancelled; and so on.”
In case you wonder which side DeVos is on, consider the fact that she hired a former dean from DeVry University to place fraud cases in higher education. He should know. DeVry was ordered to pay a $100 Million fine for misleading students. But that was before DeVos took charge.
This is not a minor problem. Nearly 5 Million students have been cheated by phony “colleges” and “universities,” whose degrees are worthless.
The Trump administration can’t be expected to make demands on this corrupt industry, since Trump himself operated one of them and was forced to repay $25 million to angry students.

Predators of a feather fleece together …
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AMEN, Jon.
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No Charlatan Left Behind—the revised American creed.
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Good one, GregB.
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DeVos is EMPTY inside…totally…wretched woman. Wonder what she sees in the mirror while brushing her teeth?
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cross posted at Oped News: https://www.opednews.com/Quicklink/Betsy-DeVos-s-Gut-Punch-to-in-Best_Web_OpEds-Betsy-Devos_Fraud_Money-180104-702.html
with this comment:”Higher ed is no the only place where FRAUD is rampant.
CHECK OUT THE RAVITCH BLOG on Charter School Fraud: https://dianeravitch.net/?s=charter+fraud
There been NO DISCUSSION in the MEDIA, about the legislative take-over of the public school systems, and the ongoing destruction — the privatization of our public education by the state legislatures that Diane Ravitch covers at her site and by the NPE — and which my series here: https://www.opednews.com/Series/PRIVITIZATION-by-Susan-Lee-Schwartz-150925-546.html?f=PRIVITIZATION-by-Susan-Lee-Schwartz-150925-546.html
re-posts with commentary that ties it all together.
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Here is another problem. A collaboration between Democrats and Republicans is shaping up to put the screws on public college/universities as if the “sins” of all are the same as for-profit programs like Corinthian.
Democrats Patty Murray, Jeanne Shaheen, and Elizabeth Warren seem to be on the same page as Republicans Lamar Alexander and Orin Hatch. All want higher education programs to be held financially ACCOUNTABLE for the rate of “successful” loan repayment by their students.
Elizabeth Warren (2015 link below) seems to think that the sins of for-profits like Corinthian College should be generalized to public institutions. Thus, executives of higher education should be in the loop of accountability (as individuals) in addition to the college/university they are in charge of: “We need real penalties for executives at colleges that defraud their students.”
Warren notes that: “Just over 10% of all college students attend a for-profit college, yet they take in about 20% of all federal student aid and account for about 44% of all student loan defaults.
Using those percentages, Warren proposes that solving the problem of college affordability begins with imposing “consequences for failing to serve students or for wasting federal financial aid dollars.” “Conservatives are right: we can’t keep pouring money into schools without demanding something in return. It’s time for the federal government to realign incentives. Here are three simple ways to dramatically increase colleges’ incentives…to cut costs and boost graduations. “
“First, force colleges to put some skin in the game on student loans. Right now, when borrowers default on their loans, students and taxpayers pay the cost – not colleges.”
”Second, require schools to spend a minimum proportion of their federal financial aid revenues on expenses directly related to education”… “not pay for exploding numbers of administrators or elaborate college marketing departments.” Call it the rule against ‘taxpayer waste.'” As an example of waste, Warren says: …”Some colleges have doubled down in a competition for students that involves fancy dorms, high-end student centers, climbing walls and lazy rivers—paying for those amenities with still higher tuition and fees.”
“Third, give colleges an incentive to cut costs by establishing “shared savings.” When colleges help more students graduate in four years instead of five or six, for example, the students save money on tuition and the government saves money on Pell Grants, work-study, and other aid.”
More at https://www.warren.senate.gov/files/documents/ShankerInstitute-AFTEducationSpeech.pdf See also the draft bills: S. 2231 (115) and S. 2201 (115)
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AS ALWAYS so smart and to the point. Professor Joel Shatzky. wrote a satire, a decade ago, as the assault higher ed, began. I was a reader for it. You would appreciate it, Laura.
Option Three: A Novel About the University: Joel Shatzky:
When Acting Visiting Assistant Professor L. Circassian is fired and rehired in the same week (with a 35 percent pay cut), he is only at the beginning of a cycle of abuse and professional debasement at the university. Joel Shatzky has created an hilarious novel about the corporatization of higher education – a book filled with blowhard deans, corrupt politicians, grasping CEOs, inept union officials, inappropriately dressed students, and scholars in donkey ears. “Option Three is an imaginative, funny and sometimes all too realistic account of life in today’s colleges and universities.”
“Joel Shatzky gives us a tour of a public university where the present vogue for competition and privatization has been taken to a logical extreme. The results are highly entertaining – and terrifying.”Shatzky tells it like it (unfortunately) is in today’s academic world.” -Del Janik, Professor Emeritus, Department of English, SUNY, Cortland :
“Option Three explores drastic takeovers of academia by corporations, in which the mantra becomes the bottom line of making money under a strict umbrella of profit only. Joel Shatzky’s bizarre, most humorous and onerous odyssey confronts these changes with keen insight and most fearless fantasy.” -David Koistinen, Associate Professor of History, William Paterson University of New Jersey :
“While much is written today about the failure of the schools, nowhere is there such a lucid account of the effect of this conspiracy on the genuine educators who are first, forbidden to do what we do best – create the lessons that develop the thinking skills that underlie all learning – and then punished and ostracized for standing our ground. I laughed at the cynical dialogue and outrageous administrative shenanigans, but when I finished, I wept like the teachers in the novel . . .” -Susan Lee Schwartz, winner of the NYSEC “Educator of Excellence Award”
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I am confused. If the Dept of Education got $30 million and billions went to state and federal regulators in fraud judgements—why are the students having to pay back anything? The Dept of Ed is expecting to get the fines out of the students?
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The students have the debts.
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So the state and federal government got huge fine payments because the students were defrauded. H-m-m. Wouldn’t you think that the money would pay off the loans? It would seem that the colleges are not the only ones taking the students for a ride.
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“Democrats Patty Murray, Jeanne Shaheen, and Elizabeth Warren seem to be on the same page as Republicans Lamar Alexander and Orin Hatch. All want higher education programs to be held financially ACCOUNTABLE for the rate of “successful” loan repayment by their students.”
Very cute. A pretty bassackwards way of addressing the problem: DofEd shells out loans far above the ability of students to pay back, evidently. Sounds familiar — didn’t something like that happen not long ago in the housing sector? If they were really concerned about all that taxpayer $ burned in unpaid-off loans to float the college-dorm-&-accessories building orgy — & line the pockets of online U admins– they might try legislating some responsible lending practices. oh, but sleazy financial/ RE/ for-profit college donors got their hands on the spigot in open position.
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Yeah, I’m pretty disappointed in Elizabeth Warren’s response as well. The people building and profiting off of Disneyland college campuses really do not seem to be terribly interested in what should be their main mission if it lines their pockets. The problem is with viewing education through a neoliberal lens that mistakenly believes that profit will not supersede the educational mission.
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At what point do we deem the US Department of Education as too corrupt to be a reliable source of information or guidance for young people?
They’re ripping young people off. robbing them. Why would anyone in their right mind accept information or advice from these people?
Young people: find a trustworthy adult- a person who hasn’t been bought. Please, please don’t take advice from crooks. You’ll carry that debt your entire life.
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At what point do we deem the U.S. Department of Education not a reliable source of information and guidance to young people? How about when U.S. Secretary of Education DeVos puts out messages with grammatical errors.
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nah. That would just make them more articulate liars and cheats.
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An oligarchy allows corporations to feed on the weak. Appointing DeVos to lead the DOE is the same as putting the fox in charge of the hen house. DeVos has long standing ties to the student loan industry, although presumably she divested herself of these interests before taking office. She is probably as divested as Trump is in his interests. Kleptocrats have few scruples. In other words her lawyers have reshuffled her interests behind a smokescreen. She is in a position to keep the money flowing from the poor to the rich. https://www.prwatch.org/news/2017/01/13207/betsy-devos-ethics-report-reveals-ties-student-debt-collection-firm
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Speaking of Foxx…
Representative Virginia Foxx (R-N.C.) has been attracting a lot of attention on the Web today — in large part because of the comments she made over the weekend in a radio interview that she has “very little tolerance” for people who graduate from college with huge student loans.
First of all, Foxx’s opinion on student loans does matter — she’s a member of the House’s Education and Workforce Committee and chairwoman of the Subcommittee on Higher Education and Workforce Training. It’s not one of the powerhouse committees known for helping its members attract a lot of campaign cash, but since Foxx was named committee chair in January 2011, she has become a magnet for campaign contributions from for-profit universities – a recent hot topic on the Hill.
Last year a Senate investigation found that nearly one-quarter of students at for-profit schools end up defaulting on student loans, and half of defaults on all student loans are by students at for-profit schools. At the time there was a lot of noise about possibly rewriting rules for how these for-profit schools can operate because so many of their students rely on federal grants or student loans – until a big lobbying push by the industry seemed to quiet things down.
In her first year on the subcommittee, Foxx picked up at least $48,668 from PACs or individuals affiliated with for-profit colleges. We counted 22 companies or trade associations in the for-profit college industry on the list of her top contributors, including: Bridgepoint Education, the Association of Private Sector Colleges and Universities, the Apollo Group (which owns the University of Phoenix) and student loan lender NelNet Inc.
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Congresswoman Fox is one of the worst members of Congress. Mean. Hard-hearted. Contemptuous of education. Please, someone, run against her.
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The grossest part to me is that most of the members of congress had their college educations subsidized in one form or another.
They’re unwilling to offer the same advantage to young people. It’s just appallingly greedy. One would think they would be grateful. They’re not. They’re more than happy to screw the next generation it it means tax breaks and campaign contributions for them.
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John Grisham recently published a book called “The Rooster Bar” that is about one of these fake colleges that makes promises that it can’t deliver on and cheats its students … cheats them BIG time.
The main characters are four of the students all saddled with huge debt. Early in the novel, one of the four kills himself to escape his bleak future and massive debt, and his three friends join together to get even with the billionaire owner of the college.
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It’s time to make this story into a miniseries! Maybe the uninformed would better understand how the wealthy are using the rest of us.
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Some of the wealthy but not all of the wealthy
For instance, George Soros and several hundred millionaires (worth $5 million or more)
And don’t believe all the Alt-Right hate crap about Soros. He might be the only billionaire on our side.
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Don’t believe any of the alt-right propaganda about Soros. He has used his fortune to support democratic groups.
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The thing about Soros – as with all billionaires – is that you have to look at how he got his money in the first place. He’s a hedge-funder, which means he earned his fortune betting in favor of crises (and, in fact, may have actively been involved in provoking crises). “In 1999, economist Paul Krugman was critical of Soros’s effect on financial markets.
Soros was also found guilty of insider trading in connection with the takeover of Societe Generale.
So, sure, I suppose most of his “philanthropy” goes for “good” causes, but we really need to think about whether it’s okay for any one person to have that kind of fortune to “give away” in the first place.
“Behind every great fortune lies a great crime.”
— Honore de Balzac
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Dienne77, you have convinced me 100-percent that you are a shill for the Alt-Right. You are the voice we can depend on to bash anyone that is not a member of the Alt-Right.
Soros might allegedly be a criminal like all billionaires are — if we follow your flawed logic — but he is a liberal/progressive billionaire and does not belong to the Alt-Right that has far too many billionaire supporters.
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I would be thrilled to get Soros money for NPE. I would not accept money from Koch or DeVos or other destroyers of democracy.
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I should say that the quote is generally attributed to Honore de Balzac. Apparently there is some controversy about whether he actually said it.
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That’s okay, Lloyd. You have convinced me that you are a shill for woman abusers. You are on record defending Al Franken because he “only” forcibly kissed and/or groped EIGHT women.
Good day.
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Wrong, as usual. I made a comment about the one photo taken on an aircraft in a war zone where the woman was wearing a flack jacket and was sleeping. That was clearly poor judgment on his part but even that woman didn’t say he ran his hands up her legs and under her panties … like Trump has been accused of doing and yet Trump is still in the White House.
Franken asked for someone else on the plane to take the photo. I didn’t make any comments about all the other women that alleged sexual misconduct at Al Franken. Once he resigned, what’s the point? His career as a politician and a comedian is clearly over. He was 66, so it was time to retire anyway.
The results: Franken apologized and resigned.
What about Trump who has been accused by 19 women?
What about Al Moore?
Why aren’t you complaining about them?
Al Franken is old news. He’s gone … out of politics and probably staying out of sight. Why do you keep carrying all this old garbage around as if it happened tomorrow?
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I hope Franken runs in the next election and is re-elected. He never got due process, he never got a hearing. He was railroaded. Yes, there is a difference between a slap on the butt, an unwanted kiss, and rape. Franken was indiscreet. He was not a rapist and has not sexually assaulted anyone. His mistakes are not in the same league with Louis CK, Charlie Rose, Harvey Weinstein, Matt Lauter, or Donald Trump. Franken deserved due process. He never got it.
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I agree. I think they all deserve due process — especially Trump. I want to see him get his day in court with the 19 women that have claimed he molested them.
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Incidentally, you’re also a shill for hedge-funders, so please don’t hypocritically bash them in the future. If what Soros did was okay, then it’s okay for the others too.
Now, good day.
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I highly recommend we read or reread Listen Liberal, by Thomas Frank.
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Agree completely about Franken, Diane!
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Back to the posted article: unbe-freaking-lievable! What else were the billions ‘won’ [collected? in part?] by fed Ed in fraud judgments for, if not to cover forgiveness of loans fed Ed foolishly dished out to “attend” this back-of-matchbook ‘correspondence school’? Levy an admin charge & write it off! Whole lotta skullduggery here. Class action against DOEd in order, no?
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