DeVos Strikes Again

Despite the recovery, student loan debt continues to be a “drag” on the economy. As numerous economists have explained, Millennials have not been buying homes (and the furniture and appliances to fill them)at the same rates as preceding generations due to the significant student debt so many of them carry.

Repayment is burdensome enough when the student assuming the debt used it at a reputable institution of higher education, and graduated with a credential that led to employment. But that hasn’t always been the case. For-profit “colleges” making extravagant claims on which they are (knowingly) unable to deliver have ripped off thousands of low-income students–and ultimately, all of us, since those students subsequently default on their government loans.

And then there are the “private” loan servicers, who have gouged other students, and who are protected against loss by government guarantees.

The Obama administration had taken several steps to punish institutions and lenders who  engaged in these practices, and to relieve the students who had been defrauded of all or part of their repayment obligations. But of course, the sympathies of the Trump administration and Betsy DeVos lie entirely with the perpetrators, not the victims.

As the IBJ recently reported,

The nation’s consumer watchdog agency is accusing the Education Department of impeding a lawsuit that could potentially bring financial relief to millions of student loan borrowers.

The Consumer Financial Protection Bureau is suing Navient Solutions, alleging one of the nation’s largest student loan servicers violated consumer protection laws and in some cases caused students to pay back too much on their student loans. But in court filings, the CFPB says the Education Department is refusing to authorize Navient to turn over documents. Without that authorization the federal government, as well as several state attorneys general suing Navient, could find it difficult to show what type of damage the company’s alleged misbehavior caused to borrowers….

Under the Obama Administration, the Education Department and the CFPB agreed to share records and resources in cases of potential violations of student borrowing or consumer protection laws. But after Trump-appointee Betsy DeVos took over, the Education Department rescinded that agreement, calling the CFPB “overreaching and unaccountable” and saying the bureau had no authority to oversee federal student loan servicers.

DeVos has previously acted to protect non-performing for-profit colleges, as Time Magazine reported in May.

Career Education Corporation is one of the companies no longer being investigated by the U.S. Education Department after members of an enforcement office tasked with investigating abuses by for-profit colleges were instructed to focus on other issues, the New York Times reported this week, citing current and former employees. Meanwhile, former executives and consultants from those for-profit institutions have been hired as top advisers to the Education Department under DeVos.

This isn’t a matter of being legitimately “pro-business.” A pro-business administration would help the entire business community by taking steps to reduce the excessive levels of student debt that are burdening economic activity generally, including weeding out the bad actors.

This is a “pro-crony” administration. And if the students suffer, well–they aren’t the political donors whose interests this administration serves.

32 thoughts on “DeVos Strikes Again

  1. Its a really bad move to pick on the little guy. Any student with a loan should be writing a letter where transparency is needed through sharing records to see if here are any violations. Students with loans trying to get an education and those graduated who are fighting to pay bills with student loan burdens need someone looking over lenders shoulders.
    I’m sure there are some who will say this is okay to help get our national debt under control because of school loan defaults.
    I’m sure reading The NY Times article is eye opening. Hopefully it has the names of the people hired by DeVos from theses institutions.

  2. I have a question. Who is holding the loans? Is it possible that those loans are being sliced and diced, packaged and sold like mortgages were before 2008?

  3. Pence is to blame for bringing Devos into this administration, along with many of the other swamp monsters that 45 has hired via pence’s recommendation. I am guessing that pence is building quite a war chest for his future run for prez with donations from those that he has managed to reward with cabinet or other high level positions within this admin.

    Not only has the swamp become deeper, but the monsters have grown significantly in this admin.

  4. Theresa; good question! Not addressed in this blog is the issue of the addition of required co-signers to obtain student loans; sorry I don’t remember the year, approximately 8-10 years ago. The parents, family members or friends who co-signed for these loans carry the same financial burden as the students – or former students with no lucrative jobs. Or are housing and supporting them so they can meet the required high student loan payments. Are there statistics regarding the number of co-signers who are burdened with these student loan debts or former students “living at home” with Mom and Dad? “Millennials have not been buying homes (and the furniture and appliances to fill them)at the same rates as preceding generations due to the significant student debt so many of them carry.” Co-signers are already indebted for purchases such as those Sheila refers to to have the necessary credit history to qualify as a co-signer. It is a musical chairs game with “Brother, Can You Spare A Dime” becoming the theme song.

    It is not only the students who are paying the price for their education; the loss of profits due to lower sales of goods and services is passed on to all of us…and Trump’s tariff increased costs of almost everything hasn’t hit yet.

    “Not only has the swamp become deeper, but the monsters have grown significantly in this admin.”

    Nancy; the monsters are being hand-fed by Trump, his cronies and Congress leading to their significant growth.

  5. Students choking on debt was a problem long before Donald Trump and Betsy taking office. The cost of an education has grown exponentially while most salaries are stuck in the 1990’s.

    What our Fascist government has basically reinforced are the income/wealth inequality gaps. Access to a college education should be limited to those families who can pay in cash. The rest of the unqualified lot should not depend on loans from the federal government.

    Why should the working class need government protection? The role of a Fascist government is to assist the oppressors–their corporate partners.

    The silver lining is this provides the ammunition for the Justice Democrats and Democratic Socialists of America. It fuels the passions of the young people who recognize that the American Dream has been reserved only for those with money. Everybody else should work as servants to those who can afford a higher quality of living.

    Our philanthropists just assisted the state in stealing away our school district. No fight from the elected board because they all negotiated with Ball State for future rewards.

    Now they are devising “Pathways” in our school system. Does anybody want to guess what pathways will be developed? The pathways will be employment tracks designed by the Chamber et al.

    The young folks choking on student loan debt are the ones demanding free college tuition for their younger siblings and forgiveness for themselves. Betsy DeVos and Pence are arguing for the lenders/government.

    If you want a peek at why there is no middle politics, education is a great place to look. Oh, and by the way, guess who else is subsidizing the high cost of college education? The Donor Class.

    But not as a taxpayer because that doesn’t give them control. They donate with strings.

    They might have all the money in the world, but when the young people figure out they have the numbers, the game will change. It will be ugly because I don’t expect the Donor Class will gladly relinquish control. 😉

  6. Under English law and as transposed to our Constitution, ‘misdemeanor” refers merely to “distinctly public conduct”. ” High Crimes and Misdemeanors could mean serious crimes , but it could also mean serious offenses that were not in technical violations of criminal law” (Cass Sunstein in Impeachment).

    Isn’t gross incompetency and/or improper behavior with malign intent as serious a failure of the exercise of executive powers in Article ll, Section 1, as abuse of power or obstruction of justice?

    Just because it may lack historic precedent does not invalidate it as valid to the impeachment articles.

  7. “Just because it may lack historic precedent does not invalidate it as valid to the impeachment articles.”

    John; doesn’t Nixon and “All The President’s Men” fit this historic precedent? Trump has gone international with his High Crimes and Misdemeanors while Nixon stayed local.

  8. Yes JoAnn.

    And I should have noted Andrew Johnson’s 11th article of impeachment was “Bringing disgrace and ridicule to the presidency by his aforementioned words and actions.”

  9. John,

    Whenever I think about how great it would be to impeach 45, I remember that Mike Pence would then take his place. Talk about going from the frying pan into the fire. With majorities in both houses, how long would it be before we had a Chistian version of Sharia law?

  10. Trump is like a long distance runner in track and field, who jumps out to a big lead during the FIRST LAP, then starts to fade, eventually falling to the ground, while his teammate [who understood the strategy] takes over the lead, and, eventually, wins the BIG RACE.

  11. Marv; if Trump is impeached in this first (and hopefully his ONLY) term in office, would leave us a brief time to deal with Rev. Pence. I see no way he could or would be elected on his own so 2020 could be a safer election for any Democrat.

  12. “I’m a greedy man, I am! Now I’m greedy for the United States!”.., he said it plainly. Where is all this ‘money we are saving’ going? Somebody, anybody, tell me that. This hole has been being dug for a long time and now we find we get exactly what we have allowed. The monsters we built are going to eat us and this nation alive. My greatest worry is that there will be no turning back now. The brakes are out, we are about on E for intellect in any form of our government and the sled is about to enter the gate with the sign that says, “Abandon all hope, ye who enter here!” All it would take is one phone call: “We are recalling the debt.” And our new Chinese overlords will announce our new ‘president.’ And the worst part of it all – is we were led to this hell by IDIOTS! Who needs education? Who needs people free of debt we want SLAVES!

  13. This reminds me. I’ll never forget the time I ran against one of my high school friends, Charlie Cherry. At the time, we both were living at the beach during the summer break. I challenged him to a race along the beach from the pier at Jacksonville Beach to the pier at Atlantic Beach, which was about two miles. Charlie was the star long distance runner on the track team, I wasn’t even on the team.

    Using the so-called Trump strategy, during the approximately two mile run, I darted ahead right at the beginning, running full speed. I created such an insurmountable lead, that Charlie could never catch-up to me, before we reached the next pier.

    I only won by a few steps. Nevertheless, just like in politics, winning is everything.

  14. JoAnn,

    It looks like It would take a NUCLEAR ATTACK ON THE U.S. before the Republicans would even consider an IMPEACHMENT, maybe not even after that. I’m not kidding. Remember what Berlin looked like at the end of W.W. II……a pile of rubble, but Hitler was still in charge.

  15. As Todd points out, the fascists running the system are absolutely creating this elitist environment for higher education. As Sheila has pointed out in a blog from a month ago, or so, the infamous Lewis Powell “manifesto” to the U.S. Chamber of Commerce in 1971 called for the creation of mind-altering entities within universities so that the so-called “liberal” academics would be put in their places. After all, Powell noted, we can’t have bigger profits without controlling the peoples’ minds. In spite of sounding like a true Stalinist, Todd hits the nail on the head today.

    Oh, and since so many of the good paying jobs have left for other countries, those deeply indebted college graduates often have to work two jobs that pay lousy wages just to stay out of court. I have a friend who is a physician who didn’t pay off his student loans until he was over 50.

    Yet another fictitious element of the American dream is being dashed on the rocks of un-regulated capitalism. It’s not entirely DeVos’s fault. She’s merely a member of and the product of the donor class that wants ALL the money for themselves.

  16. We have in the USA the À la carte system. À la carte is a restaurant term as defined practice of ordering individual dishes from a menu in a restaurant. A good example of À la carte was automobiles back in the 1960’s you could add on Air Conditioning and an Automatic Transmission for an additional cost, if you could afford to.

    Our À la carte system here in the USA extends to Heath Care and Education. You can have good health care and a higher education if and only if you can afford it.

    It is interesting IBJ has an article on student debt, the Capitalist’s must be getting worried.
    A couple of interesting notes:

    July 22, 2018 Lawsuit against Navient can proceed — why student loan borrowers should pay attention.
    A lawsuit against a student loan giant can proceed, a judge ruled last week, in a decision that could make student-loan companies more vulnerable to lawsuits alleging they mislead borrowers.

    The judge denied Navient’s motion to dismiss a lawsuit filed by the state of Illinois last year, alleging the company and its corporate predecessor, Sallie Mae, violated state consumer protection laws by misleading borrowers about the repayment options available to them and making it more difficult and expensive than necessary to repay their loans, among other claims. https://www.marketwatch.com/story/illinois-lawsuit-against-navient-can-proceed-why-student-loan-borrowers-should-pay-attention-2018-07-19

    >>Earlier this year, Secretary of Education Betsy DeVos backed the companies up, issuing a memo saying that state laws governing student loan servicers are preempted by federal regulations.<<< Side Bar – The Crony-Capitalist Right Wing Reactionary Republican Party that normally champion's State's Rights seeks to nullify State's Rights in this case.

    I would not expect the state of Indiana to challenge Navient, since the IBJ article points out:

    Navient is headquartered in Wilmington, Delaware, but has more than 2,000 employees in Indiana at offices in Fishers, Indianapolis and Muncie. `The company, formerly part of Sallie Mae, owns the 450,000-square-foot former USA Group headquarters in Fishers along Interstate 69, where about 1,400 people work. It also owns a 50,000-square-foot loan-servicing center in Indianapolis.

  17. Education is the country’s future. It’s not a business, it’s an investment in those people who will maintain the country and all of the people and all of the businesses that implies.

    Trump is uneducated despite his ego recitals. DeVos is uneducated in life. Pence is also. He believes in a mythical kingdom of only his tribe. They have no idea what they are doing and no idea that they have no idea. We are steaming into the unknown depending on luck instead of intelligence to get us by the shoals.

    The results were perfectly predictable years ago when this shit storm started, and there has been nothing revealed that is a surprise since. We knew where this would go and it has.

    All of that was out of our control thanks to Thug One, Putin, and the entertainment media that found bigger profits in entertainment for hire by Republicans than in news reporting.

    We have to get in back in the control of we the people or we the people will lose it forever.

    To me, and I’m certainly not very sophisticated politically, it boils down to Nov 6, just around the corner. We the people either rise to the challenge or we don’t. If we chose not to I see no workable plan B except riots in the streets a la the Middle East. Chaos isn’t really a plan.

    So every day now is a resource that can be invested or wasted in getting every Democrat or fed up Republican or confused Independent to vote D in every election.

    I know that perfection is never realizable, we are only human, but think of the message that a complete D sweep on Election Day would send loud and crystal clear to the world, to this Administration, to the GOP, to the world, to Thug One, to Kim Jong Un, to the future.

  18. Most of you were not prepared for a Trump victory. It’s created a fundamental change that you can’t deal with. That’s only human. They only answers can come through the SCENARIO VEHICLE which is IMAGINATIVE LEAP INTO THE FUTURE.

    “In a scenario process, managers invent and then consider, in depth, SEVERAL VARIED STORIES of EQUALLY PLAUSIBLE FUTURES. The stories are carefully researched, full of relevant detail, oriented toward real-life decisions, and designed (one hopes) to bring forward surprises and unexpected leaps of understanding. Together the scenarios comprise a tool for ORIENTING ONES PERCEPTIONS. The point is not to “pick one preferred future,” and hope for it to come to pass (or, even, work to create it—though there are some situations where acting to create a better future is a useful function of scenarios). Nor is the point to find the most probable future and adapt to it or “bet the company” on it. Rather, the point is to make strategic decisions that will be sound for all plausible futures. No matter what future takes place, you are more likely to be ready for it—and influential in it—if you have thought seriously about scenarios.”

    ~”The Art of the Long View: Planning for the Future in an Uncertain World” by Peter Schwartz, President, Global Business Network (Doubleday, New York, 1991) p. xiiv

    For example: It’s like a quarterback in football, a point guard in basketball, or a pitcher in baseball. You can’t win with just one option. You have to have a variety of plays or pitches.

    As I mentioned before, PHYSICAL KINETIC INTELLIGENCE is vitally important in dealing with the Trump administration. You have to be able to make the right play from different perspectives.

    I believe PEACEnet can do just that . It’s taken me over twenty-five years to prepare for the eventuality of this SNEAK ATTACK. Hopefully, it is in time to make a difference.

  19. Coincidentally, 1991, the year the “Art of the Long View” was published, is the same year that my companion and I self-published “Democracide: The Far Right’s Path to Power.”

  20. Pete makes a critical point. Education is not an expense, it (like medical care and infrastructure repair and renewal) is an investment, one for which there is no immediate return as demanded by Wall Street, but one that pays handsome dividends in time. I have seen statistics that show the money we invested in the GI Bill after WW II paid off in terms of an 8 to 1 ratio in enhanced government revenues, meaning that the government made money by spending it. The increase in compensation to these educated people also contributed greatly to the booming demand which anchored a booming economy following WW II. Giving money to the superrich is spending for which we get no or little return, especially when giving such recipients of taxpayer largesse tax cuts; educating and keeping our people healthy is investment for which we enjoy good returns as they become productive and are enabled to add to aggregate demand, the sole arbiter of economic growth.

    Sheila also alludes to the fact that millennial grads are so hamstrung in debt that they can’t build homes of their own and all the furniture and fixtures that go with it and that is a drag on the general economy. True, and they are not marrying and replenishing the race at sustainable levels so that we must depend upon immigration (though what birthrate is necessary in the face of AI and less need for human labor is up for debate).

    The argument is not what who owes whom; it’s whether we have the collective vision to make good investments leading to a win-win for everyone, even government.

  21. To be more specific: 1991 is the year “Democracide: The Far Right’s Path to Power” was first put into written form. In 1992, it was the format for my three hours of testimony, given at the request of a special closed session of the U.S. Civil Rights Commission, convened in Jacksonville. The final draft was self-published in 1993.

  22. I wrote in Facebook today:

    “The Republican Party years ago became a de facto business with products (various degrees of influence in government, advertising (Fox “News” et al), customers (donors), workers (Republican branded politicians), the whole package aimed at make more money regardless of the impact on others.”

    “Now we are living the results of their deception.”

    The big limitation of the GOP business is that, like many businesses today, they have no mission except to make more money regardless of the impact on others. It’s all short term with no regard for creating and investing in the long term.

    Business is not really primarily about expenses but about investment. Managing expenses gets you through this month but is pointless without a long term vision.

    The Republicans offer none. The Administration is incapable of vision. Their long term intent changes daily with Trumptweets. They are squirrel chasers extraordinaire.

  23. Pete,

    “The Administration is incapable of vision. Their long term intent changes daily with Trumptweets.”

    Right on point. That’s their major underlying weakness which leads to miscalculations. They’re not home free, not yet, at least.

  24. Time and again, Trump says he opposes the things he DOES. So the swamp he said he’d clear, he deepens instead. I’m now conditioned to it. Whenever he says something that seems to appeal (which is infrequent), I gird for the opposite.

  25. We have no effective government. How long can we survive on the legacy of Obama? Four years to my mind would require extraordinary luck.

    My Mercedes diesel has a “limp home mode” for when things go wrong.

    Running the country from the Legislative Branch with a hostile Executive Branch and a weakened Judicial Branch is limp home mode which may allow us to survive until 2020 when we can start the long process of recovery and see what’s then possible to start to catch up with the rest of the world now leaving us behind.

  26. Out and about today and read a free Indianapolis Star Another article about Pastor Pence as The Star pushes Andrea Neal’s book – “Pence: The Path to Power”. The former IndyStar reporter (Andrea Neal), who was appointed to the State Board of Education by Governor Pence in 2013.

    Pastor Pence and Betsy DeVos not only agree with the privatization of education (privatization meaning socializing the cost and privatizing the profits), but injected a strong dose of toxic evangelicalism into our education system.

    For DeVos and Pastor Pence, the serial liar, sexist and racist – that is President Agent Orange is the means that justifies their ends. No amount of corrupt behavior by Agent Orange and his family of vampires, will cause DeVos or Pastor Pence to question the morality of this Regime.

  27. I’m sending this on to my daughter who earned a Masters of Social Work at the University of South Carolina with a debt of $30,000!! She works for $40K a year, and has 2 children, a car payment, a mortgage payment, etc. I’ll bet Betsy DeVos kids don’t have to struggle to pay for their education! This whole administration makes me sick — not to mention the working class suckers who voted for him!!! Aaaaaaggghhhhhh!!

  28. Never lose sight of the fact that every time Betsy makes education seem less obtainable to a would-be college student, she moves one notch higher in the pantheon of Republican heaven. No Republican program since Dick Nixon has met with greater success than the Dumbing Down of America, and she certainly made her contribution. An ignorant America is a Republican America, without grace, nuance, or a scintilla of self-doubt or introspection or respect for democracy. How comforting to know that you are always right and that anyone who disagrees will be punished.

    And yet, I can’t help wondering why the Duke education I experienced in the late 1950s cost under $10,000 total, and today that number is climbing toward $80,000. Of course Duke now has a lemur center and a world reputation, but how much does that add to the quality of an education once available even to relatively poor kids? At an annual rate of increase of 8%, the cost will be $140,000 by 2027, a number even Doris Duke’s family would have found impressive. If my school received only 5% return on its $8 billion endowment, shouldn’t that $400 million cover the full cost of every student? America, if it hasn’t already arrived, is headed toward plutocracy, because only plutocrats will have been to college. Grad school? No way!

  29. Terry; Duke, I.U., Purdue, Notre Dame, Harvard, Yale, etc., etc., etc., at least party of the student loan costs are for those “brand name” schools…and their sports coaches and arenas. It took Indiana University a few years to pay off Bobby Knight’s coaching contract after he was fired for one too many public temper tantrums…”The Chair Threw Around The World”. His contract required payment of full contract amount even if fired. Students and their parents paid for that via higher student loans. No surprise that he went pubic recently supporting Trump.

  30. The lion, the king of the jungle, is so strong and deadly, he does not need long-term thinking, a careful study of options or a strategy of any kind. Trump places his (and America’s) pile of chips on simply rising above all competition like a lion. Once there, we Americans can rule with threat, swagger, impulse, and even ignorance. It’s an attractive concept for the far right. Strength and brutality solves a lot of problems.

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