Archives for category: Student Financial Aid and Student Debt
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Valerie Strauss Reviews Pete Buttigieg’s Education Plan

By dianeravitch
December 7, 2019 //
38

The media received early copies of Mayor Pete Buttigieg’s plan for K-12 education. Like Warren and Sanders, he proposes a large increase in funding for the neediest children and for early education. He wants to see a reduction in college tuition. He does not propose a wealth tax on the 1%. He is against for-profit charters but, unlike Warren and Sanders, would not eliminate or freeze the federal Charter Schools Program, which currently dispenses $440 million a year, mostly to big corporate chains like KIPP and IDEA.

Mayor Pete’s plan is a centrist program, which could have been drafted by the Center for American Progress, the think tank for the Obama administration.

Valerie Strauss describes the plan here.

She writes:

Democratic presidential candidate Pete Buttigieg is unveiling a broad new education plan on Saturday that pledges to spend $700 billion over a decade to create a high-quality child care and preschool system that he said would reach all children from birth to age 5 and create 1 million jobs.

The 37-year-old, openly gay mayor of South Bend, Ind., also promised to spend $425 billion to strengthen America’s K-12 public schools, targeting federal investments and policy to help historically marginalized students. He would boost funding for schools in high-poverty areas as well as for students with disabilities, and promote voluntary school integration. And he said he would ensure that all charter schools — which are publicly funded but privately operated — undergo the same accountability measures as schools in publicly funded districts…The more than $1 trillion in his plan would be spent over 10 years and would come from “greater tax enforcement” on the wealthy and corporations, according to a Buttigieg campaign spokesperson, who asked not to be identified. He would not impose a new tax on the super-rich, the spokesperson said, who did not detail how much money the mayor believes he can realize from uncollected taxes…

Buttigieg’s new education plan details a push to help communities integrate their schools racially and economically, which research shows is beneficial to black and white students. The mayor pledged to invest $500 million into communities that want to undertake integration efforts. And he said he would reinstate Obama era guidance on the voluntary use of race in state- and district-level strategies to achieve integration, removing current restrictions on the use of federal funds to pay for busing that would be part of integration efforts.

He also pledged triple funding for Title I — the largest federally funded educational program, intended to help schools with high concentrations of students who live in poverty. But that added funding would be targeted to states and districts that “implement equitable education funding formulas to provide more state and local resources to low-income schools….”

Both Sanders and Warren have called for free college tuition for all, while the mayor’s recently released higher education and workforce development plan calls for lowering college tuition and fees on a sliding scale, with free college for those students whose families early up to $100,000. Former vice president Joe Biden, who has topped the polls more consistently than any of the other candidates, has also taken education positions less expansive than Warren and Sanders.

Buttigieg’s big initiative in this plan is around early childhood, for which he has pledged to spend $700 million to create a new system to provide child care and prekindergarten to all children, which he said is more than 20 million, and that would create 1 million new jobs in that sector.

For additional insight on Mayor Pete’s plan, read Matt Barnum and Kalyn Belsha’s account here in Chalkbeat. 

Categories Accountability, Charter Schools, Early Childhood Education, Funding, Higher Education, Student Financial Aid and Student Debt

Politico: Betsy DeVos and ED Collected Student Debt in Error on Thousands More Defrauded Students

By dianeravitch
December 5, 2019 //
0

Politico Morning Education reports that the U.S. Department of Education mistakenly collected debt from many thousands of students who had been defrauded by a failed online for-profit college and were previously unreported. The last time the Department acknowledged having hounded students in error, it was fined $100,000. Why not fine the Secretary and the officials in charge personally so that they get the message that it is wrong to pursue collections from students whose debt should have been forgiven? (Today’s Politico was underwritten by the Waltons.)

 

A COURT FILING THIS WEEK REVEALED TENS OF THOUSANDS OF ADDITIONAL CORINTHIAN COLLEGES STUDENT BORROWERS WERE TARGETED FOR COLLECTION BY THE EDUCATION DEPARTMENT. The new disclosures have infuriated plaintiffs of an ongoing lawsuit against the government.

— In October, after the Trump administration initially said it erroneously collected on the loans of some 16,000 Corinthian borrowers, a federal judge held DeVos in contempt of court and imposed a $100,000 fine for violating an order to stop collecting on student loans from the defunct for-profit college.

— Now, according to the department, that means a total of 45,801 borrowers “were erroneously taken out of forbearance or stopped collections status.” That includes the roughly 29,000 newly identified borrowers, plus the original 16,034 borrowers. “FSA has now placed all 45,801 borrowers in the correct status,” the government’s court filing said.

— What’s to blame for the mixup? The department said an “isolated communication” between Federal Student Aid and its contractors, plus “other logistical issues” caused the undercount. The government said FSA “now believes that it has an accurate account of existing borrower defense applicants.”

— “Students and taxpayers should be infuriated by the Department of Education’s complete disregard for student borrowers,” said Toby Merrill, director of the Project on Predatory Student Lending. “Secretary DeVos has already been found in contempt of court for her illegal collections on students. Now we find out the impact was far greater than previously reported, and she still hasn’t returned all the money owed to students. It is galling, it’s unlawful, and it can’t be tolerated.”

Categories Accountability, Betsy DeVos, Fraud, Higher Education, Student Financial Aid and Student Debt, U.S. Department of Education

Democrat from CAP Joins DeVos Team

By dianeravitch
November 7, 2019 //
94

I am speechless. Wordless. How could anyone who cares about their reputation join the most shameless department in the most shameless administration in history? DeVos showed her colors when she harassed 16,000 students to pay debts for their time at the closed for-profit  Corinthian Colleges when the debts would have been cancelled. She has repeatedly shown her views: her contempt for public schools and for civil rights enforcement.

Reported by Politico Morning Edition:

 

CAP’S COLLEEN CAMPBELL TO JOIN EDUCATION DEPARTMENT: Campbell, the director of postsecondary education at the Center for American Progress, will join the department later this month to oversee strategic communications for the NextGen project.

— NextGen’s goal is to overhaul how the federal government collects student loans.It involves creating and running a new platform on which tens of millions of borrowers will manage their loans, as well as awarding contracts that are collectively worth billions of dollars to financial services companies.

— During her time at CAP, Campbell wroteextensively about the department’s student loan servicing proposals and has been widely quoted about the issue in the press.

— Campbell said she decided to take a role in “a government and an administration under someone who I don’t always agree with” because she believes the Office of Federal Student Aid has “a vision that’s borrower- and student-focused” when it comes to the NextGen plan.

— Campbell’s hiring brings new progressive credibility to a project that Education Secretary Betsy DeVos has described as one of the major ways she’s working to modernize and streamline how the department operates. Read more from Michael Stratford.

Categories Accountability, Betsy DeVos, Higher Education, Student Financial Aid and Student Debt, Trump

David Dayen: How Betsy DeVos Radicalized Her Own Staff

By dianeravitch
October 25, 2019 //
11
ON TAP Today from the American Prospect
October 25, 2019

Dayen on TAP

The Education Department’s Rip-Off Schemes Radicalize Its Own Staff

Billionaire daughter-in-law to the Amway fortune Betsy DeVos probably contracts with the U.S. Mint to exclusively reissue $100,000 bank notes so she can light them on fire to light candles in her office. But she’ll have exactly one less, after a federal judge in San Francisco fined her exactly that amount, because the Education Department continues to collect on fraudulent loans issued to students of shady for-profit college network Corinthian Colleges.

 

Around 16,000 students have been affected by DeVos collecting on illegal loans, so that’s $6.25 each. Nevertheless, seeing any personal liability at all for an Education Department that not only failed to stop Corinthian from lying to students and saddling them with debt for worthless diplomas, but then kept trying to squeeze those students for unlawful payments, must offer at least a little solace. The Education Department resisted compensating Corinthian students at all, until they went on a debt strike. Under Arne Duncan, students ripped off by for-profit colleges were allowed to assert “defense to repayment” to get the loans canceled.

 

That process moved at turtle-like speed, with only one-fifth of Corinthian students made whole by the time DeVos took over. She instituted hurdles to prevent loan forgiveness, which Judge Sallie Kim ruled unlawful. This ruling is stayed pending appeal, but DeVos’s department kept trying to collect loan payments anyway, despite the dispute. Three thousand borrowers made these payments. The Education Department even garnished wages on 1,800 students, which it had no right to acquire.

 

Essentially nobody abused by Corinthian has had loans canceled during DeVos’s tenure. However, she has created momentum for mass loan forgiveness—inside her own department. A. Wayne Johnson, whom DeVos appointed as chief operating officer for the Office of Federal Student Aid, resigned this week, calling the system “fundamentally broken.” He’s now running for Senate (as a Republican) in Georgia, endorsing the cancellation of $50,000 in student-loan debt for every borrower, while adding a $50,000 tax credit for everyone who had already repaid their loans. This is a more robust student debt cancellation proposal than Elizabeth Warren’s (because it includes no means testing), from a Republican DeVos appointee who’s actually seen the student debt crisis up close. That’s how radicalizing it is. The way we finance higher education cannot sustain itself, and everyone to the left of Betsy Hundred Thousand DeVos ought to demand a reset.
Categories Betsy DeVos, Education Reform, Student Financial Aid and Student Debt

Federal Judge Holds DeVos in Contempt of Court, Fines Ed Department $100,000

By dianeravitch
October 24, 2019 //
48

 

A federal judge found Secretary of Education Betsy DeVos in contempt of court and fined her Department $100,000, which is less than a slap in the wrist. It won’t begin to cover the losses suffered by students who were hounded by the Department to repay fraudulent student loans for a fraudulent education at for-profit colleges. DeVos believes it is her duty to protect the fraudsters, not the students.

A federal judge on Thursday held Education Secretary Betsy DeVos in contempt for violating an order to stop collecting loan payments from former Corinthian Colleges students.

Magistrate Judge Sallie Kim of the U.S. District Court in San Francisco slapped the Education Department with a $100,000 fine for violating a preliminary injunction. Money from the fine will be used to compensate the 16,000 people harmed by the federal agency’s actions. Some former students of the defunct for-profit college had their paychecks garnished. Others had their tax refunds seized by the federal government.

“There is no question that the defendants violated the preliminary injunction. There is also no question that defendants’ violations harmed individual borrowers,” Kim wrote in her ruling Thursday. “Defendants have not provided evidence that they were unable to comply with the preliminary injunction, and the evidence shows only minimal efforts to comply.”

Categories Betsy DeVos, Education Reform, For-Profit, Fraud, Higher Education, Student Financial Aid and Student Debt

DeVos Sent Millions to Unaccredited Colleges

By dianeravitch
October 23, 2019 //
39

Evidently every part of the Trump administration believes it is above the law. The Washington Post reported today that the Education Department spent millions for student aid at for-profit colleges that were ineligible to receive federal

funding.

A trove of documents released Tuesday by the House Education and Labor Committee shows the Education Department provided $10.7 million in federal loans and grants to students at the Illinois Institute of Art and the Art Institute of Colorado even though officials knew the for-profit colleges were not accredited and ineligible to receive such aid.

The documents build on prior reports from the committee describing efforts by Education Department officials to shield Dream Center Education Holdings, owner of the Art Institutes and Argosy University, from the consequences of lying to students about the accreditation of its since-closed schools. Now it appears the Education Department tried to shield itself from an ill-fated decision to allow millions of dollars to flow to those schools.

Rep. Robert C. “Bobby” Scott (D-Va.), chairman of the House Education Committee, is threatening to subpoena Education Secretary Betsy DeVos for more documents related to the department’s role in Dream Center’s actions. Scott says the agency has obstructed the committee’s investigation and refused to answer questions, as emails and letters paint a picture of a federal agency complicit in an effort to place profits before students.

Categories Betsy DeVos, For-Profit, Higher Education, Student Financial Aid and Student Debt, U.S. Department of Education

DeVos to Judge: “Don’t Lock Me Up”

By dianeravitch
October 16, 2019 //
25

Politico reports that the Trump administration is apologizing profusely for hounding students whose loans for attending the predatory (now closed) Corinthian Colleges should have been forgiven. The judge in the case had threatened to punish Betsy DeVos for violating her court order. This is a case of “accountability for thee, but not for me.”

MAKING THE CASE AGAINST CONTEMPT FINDING: The Trump administration, in a court filing on Tuesday night, outlined why the Education Department and DeVos shouldn’t be held in contempt or face fines for violating U.S. Magistrate Judge Sallie Kim’s May 2018 order to stop collecting the student loans of former Corinthian Colleges students.

— Justice Department attorneys wrote that the Education Department “has been working diligently and in good faith to correct the errors” that led to the agency collecting on the student loans of thousands of borrowers despite the order. Kim is now deciding whether to hold the department and DeVos in contempt and impose sanctions, including fines, against them.

— “Loan servicers made an error on a small # of loans,” DeVos tweeted last week. “We know & we’re fixing it.” She also accused Sen. Elizabeth Warren of lying about the issue.

— The Trump administration’s filing mostly strikes a conciliatory tone. The department said it appreciates the “gravity” of the situation and the effect it had on affected borrowers. The department also said it was committed to coming into full compliance with the court’s order and asked that any sanctions be “forward-looking” rather than punitive.

— The Education Department conceded, though, that it had been “negligent” in its oversight of student loan companies. The “errors at issue here were not the result of any willful or intentional conduct on the part of the Department, but, as the Court has recognized, gross negligence, including negligent oversight of the Department’s servicers,” attorneys for the department wrote.

— Education Department officials last week sent letters admonishing its loan servicers over the issue and moved to discipline two department officials.

Categories Accountability, Betsy DeVos, Education Reform, Fraud, Higher Education, Student Financial Aid and Student Debt

Betsy DeVos Breaks the Law by Continuing to Collect Debt from Students After Judge Told Her Not to

By dianeravitch
October 8, 2019 //
50

Will billionaire Betsy DeVos go to jail for defying the direct order of a judge?

In 2015, for-profit Corinthian Colleges went bankrupt after state attorney generals complained of fraud. Thousands of its former students were left in the lurch with a mountain of debt for a worthless “education.” After the company filed for bankruptcy protection, the federal department of education ruled that as many as 335,000 students might have their debts canceled, “under The Borrower Defense to Repayment program—an initiative started in 2016 to provide loan relief for students who had been defrauded by predatory schools.” This was during the Obama administration.

However, when DeVos became Secretary of Education, she limited the program of loan forgiveness and began to hound many of the students who had been defrauded. The applications of some 160,000 students for loan forgiveness were shelved. DeVos was ordered by Judge Sallie Kim to stop hounding students to repay student loans that should have been forgiven.

But, as we have seen before, Secretary DeVos has great sympathy for for-profit corporations and no sympathy for students who were defrauded.

Education Secretary Betsy DeVos has been threatened with the possibility of jail after a judge deemed she was violating a court order for continuing to collect student debts on a now-defunct school.

That ruling, handed down in June of 2018, was made by U.S. Magistrate Judge Sallie Kim and prevented DeVos and her Department of Education for going after former students at the bankrupt Corinthian Colleges Inc.

However, Kim said she was “astounded” to discover that DeVos was violating the court order at a hearing in San Francisco on Monday after a filing by the Education Department earlier disclosed that more than 16,000 former students at Corinthian College “were incorrectly informed at one time or another … that they had payments due on their federal student loans.”

“At best it is gross negligence, at worst it’s an intentional flouting of my order,” Kim said, reported Bloomberg.

“I’m not sure if this is contempt or sanctions,” she added. “I’m not sending anyone to jail yet but it’s good to know I have that ability.”

The same story is here in the Washington Post.

Is it time to chant “Lock her up”?

 

Categories Accountability, Betsy DeVos, For-Profit, Higher Education, Student Financial Aid and Student Debt

Billionaire Pledges to Pay Student Debt of 2019 Morehouse College Graduates

By dianeravitch
May 19, 2019 //
6

Investor Robert F. Smith was invited to give the commencement address at Morehouse College, an all-male historically black college in Atlanta. Smith is the wealthiest black man in America, with a fortune estimated at $4-5 billion.

Smith began his speech by talking about his good fortune, having been bused to an integrated public school in Denver. 

Smith described being bused to a high-performing, predominantly white school across town in Denver, where he grew up. He said he’ll never forget climbing onto bus No. 13 to Carson Elementary.

“Those five years drastically changed the trajectory of my life,” he said. “The teachers at Carson were extraordinary. They embraced me and challenged me to think critically and start to move toward my full potential. I, in turn, came to realize at a young age that the white kids and the black kids, the Jewish kids and the one Asian kid were all pretty much the same.”

After talking about how he achieved success, he dropped his prepared remarks and announced that he was paying all the student debt of the class of 2019, some 400 young men. The students were stunned, then broke into cheers and tears, along with their families.

This was a beautiful act of genuine philanthropy. Mr. Smith is not controlling anyone’s life, he is giving without strings or conditions. I know many readers will react by saying that higher education should be tuition-free, and I agree. But it is not. So for now, I say, thank you for this generous and kind act, Mr. Robert F. Smith.

Since the Washington Post is behind a paywall, here are other sites on which to read this heart-warming story, including a video clip.

See here, here, here.

Something tells me Robert F. Smith will have many invitations to give commencement addresses in years to come.

 

Categories Education Reform, Higher Education, Philanthropy, Student Financial Aid and Student Debt

Another For-Profit ”College” Chain Collapses, Students Left with Debt

By dianeravitch
March 10, 2019 //
6

 

Another for-profit chain of colleges has gone into bankruptcy and its students ar3 left holding the bag, loaded with debt and worthless degrees. Policing these institutions is the job of the Education Department. For years, the for-profit colllege Industry has hiredlobbyists from both parties to protect them.

 

The New York Times reports:

“When the Education Department approved a proposal by Dream Center, a Christian nonprofit with no experience in higher education, to buy a troubled chain of for-profit colleges, skeptics warned that the charity was unlikely to pull off the turnaround it promised.

“What they didn’t foresee was just how quickly and catastrophically it would fail.

“Barely a year after the takeover, dozens of Dream Center campuses are nearly out of money and may close as soon as Friday. More than a dozen others have been sold in the hope they can survive.

“The affected schools — Argosy University, South University and the Art Institutes — have about 26,000 students in programs spanning associate degrees in dental hygiene and doctoral programs in law and psychology. Fourteen campuses, mostly Art Institute locations, have a new owner after a hastily arranged transfer involving private equity executives. More than 40 others are under the control of a court-appointed receiver who has accused school officials of trying to keep the doors open by taking millions of dollars earmarked for students.

“The problems, arising amid the Trump administration’s broad efforts to deregulate the for-profit college industry, began almost immediately after Dream Center acquired the schools in 2017. The charity, started 25 years ago and affiliated with a Pentecostal megachurch in Los Angeles, has a nationwide network of outreach programs for problems like homelessness and domestic violence and said it planned to use the schools to fund its expansion.

“Now its students — many with credits that cannot be easily transferred — are stuck in a meltdown. On Wednesday, members of the faculty at Argosy’s Chicago and Northern Virginia campuses told students that they had been fired and instructed to remove their belongings. In Phoenix, an unpaid landlord locked students out of their classrooms. In California, a dean advised students two months away from graduation not to invite family to attend from out of town.

“In less than a month, everything I have worked for the past three years has been taken from me,” said Jayne Kenney, who is pursuing her doctorate in clinical psychology at Argosy’s Chicago campus. “I am also conscious of the fact that what seems like the swift fall of an ax in less than one month has in reality been festering for years.”

“The fall accelerated last week when the Education Department cut off federal student loan funds to Argosy after the court-appointed receiver said school officials had taken about $13 million owed to students at 22 campuses and used it for expenses like payroll. The students, who had borrowed extra money to cover things like rent and groceries, were forced to use food banks or skip classes for lack of bus fare.

“Lauren Jackson, a single mother seeking a doctorate at the Illinois School of Professional Psychology, an Argosy school in Chicago, did not receive the roughly $10,000 she was due in January. She has been paying expenses for her and her 6-year-old daughter with borrowed money and GoFundMe donations.

“On Tuesday, after three months of not paying her rent, she received an eviction notice.

“I didn’t want to go home and tell my baby that Mommy may not be a doctor,” said Ms. Jackson, whose school could close Friday. “Now I don’t want to go home and tell her that we don’t have a home.”

‘Bad for Everyone’

“Led by Secretary Betsy DeVos, the Education Department has reversed an Obama-era crackdown on troubled vocational and career schools and allowed new and less experienced entrants into the field.

“The industry was on its heels, but they’ve been given new life by the department under DeVos,” said Eileen Connor, the director of litigation at Harvard Law School’s Project on Predatory Student Lending.

“Ms. DeVos, who invested in companies with ties to for-profit colleges before taking office, has made it an agency priority to unfetter for-profit schools by eliminating restrictions on them. She also allowed several for-profit schools to evade even those loosened rules by converting to nonprofits.

“That’s what Dream Center wanted to do when it asked to buy the remains of Education Management Corporation.

“Education Management, once the nation’s second-largest for-profit college operator, was struggling for survival after an investigation into its recruiting tactics resulted in a $200 million settlement in 2015. Despite those troubles, it had 65,000 students, and some of its schools maintained strong reputations.

“Dream Center is connected to Angelus Temple, which was founded by Aimee Semple McPherson, a charismatic evangelist once portrayed by Faye Dunaway in a TV movie, “The Disappearance of Aimee.” It is affiliated with the Foursquare Church, an evangelical denomination with outposts in 146 countries.

“Buying a chain of schools “aligns perfectly with our mission, which views education as a primary means of life transformation,” Randall Barton, the foundation’s managing director, said when Dream Center announced its plan.

“But Dream Center had never run colleges. It hired a team including Brent Richardson, who worked on the conversion of Grand Canyon University to a nonprofit as its chairman, to lead the schools’ corporate parent, Dream Center Education Holdings. He stepped down in January.

“Alarms were ringing from the moment the takeover was proposed. Dream Center’s effort to buy the failing ITT Technical Institutes schools had fallen apart after resistance from the Obama administration. When it asked to buy Education Management’s schools, consumer groups, members of Congress and some regional accreditors raised concerns.

“But in late 2017, Ms. DeVos’s agency gave preliminary approval to Dream Center’s plan.

“Almost immediately, the organization discovered the schools were in worse shape than expected, with aging facilities and outdated technology. The universities “were, on the whole, failing without hope for redemption,” the receiver wrote in a court filing last month.

“Dream Center had anticipated a $30 million profit in its first year, Mr. Barton wrote in a recent legal filing. Instead, it was facing a $38 million loss.

“And Dream Center showed little inclination to curb the tactics that got Education Management in trouble, like misleading students about their employment prospects. The executives it installed cultivated a high-pressure culture in which profit surpassed all other concerns, according to a report filed last year by Thomas J. Perrelli, the court-appointed monitor overseeing the schools’ compliance with their state settlements.

“By the end of 2018, Dream Center was facing eviction on at least nine campuses and owed creditors more than $40 million, and Education Department officials scrambled to plan for what looked like an imminent implosion.

“We know all too well that precipitous school closures are bad for everyone involved and leave too many students high and dry,” said Liz Hill, an agency spokeswoman. “Teams of people at the department have been working tirelessly on behalf of students — caught up in this situation through no fault of their own — with the singular goal in mind to ensure as many students as possible had options to complete their education.”“The way they presented the receivership was that it would be beneficial to the students, but it’s actually been detrimental,” said Marina Awed, a student at an Argosy school in California, Western State College of Law, who was scheduled to graduate in two months. “It shouldn’t be this easy to defraud the Department of Education.”

Disgraceful.

Categories Accountability, For-Profit, Higher Education, Student Financial Aid and Student Debt
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