(Written jointly by Private Equity Stakeholder Project and Americans for Financial Reform)
Since taking office, Trump-appointed Secretary of Education Betsy DeVos, herself the former chair of and current investor in a private equity firm[i], has moved swiftly to roll back oversight of and regulations governing for-profit colleges as a number of for-profit college industry figures, including Robert Eitel and Julian Schmoke, have joined the Department of Education.[ii]
For example, DeVos has failed to implement and moved to gut the Obama-era Gainful Employment Rule, which requires for-profit schools and programs to help students prepare for “gainful employment in a recognized occupation” to receive federal funding.[iii] More than one third (35%) of the 804 college programs that failed the Department of Education’s Gainful Employment Rule were at for-profit colleges owned by private equity firms.[iv] DeVos also is moving to erase the Obama Borrower Defense Rule, which established procedures for students harmed by their schools to have their federal loans cancelled. Thus far, 98.6% of all Borrower Defense claims have been filed by for-profit college students.[v]
The Department of Education under DeVos has also ceased coordination with the Consumer Financial Protection Bureau[vi], a partnership which had resulted in multiple settlements with for-profit colleges and hundreds of millions of dollars in loan forgiveness, including a $24 million settlement at private equity owned Bridgepointe Education.[vii] DeVos also may give a sympathetic response to accreditor ACICS, which is now seeking reinstatement.
[iv] Gainful Employment DMYR 2015 Final Rates, US Department of Education.