Betsy DeVos Overruled Education Department Findings On Defrauded Students The education secretary says many students who were defrauded by for-profit colleges don't deserve full relief from their loans. Department memos show career staff arguing the opposite.
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Betsy DeVos Overruled Education Dept. Findings On Defrauded Student Borrowers

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Betsy DeVos Overruled Education Dept. Findings On Defrauded Student Borrowers

Betsy DeVos Overruled Education Dept. Findings On Defrauded Student Borrowers

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STEVE INSKEEP, HOST:

Two hundred thousand American students now know that officials in the U.S. Education Department were on their side. They took out student loans. They said for-profit colleges fleeced them. They would like their loans forgiven. And internal Education Department documents obtained by NPR argue that the loans should have been forgiven. So why did the education secretary say no?

NPR's Cory Turner got his hands on those documents. He's in our studios. Good morning.

CORY TURNER, BYLINE: Good morning, Steve.

INSKEEP: What's this fight about?

TURNER: So you'll remember a few years ago, during the Obama administration, a handful of big, high-profile, for-profit colleges essentially collapsed...

INSKEEP: Right.

TURNER: Corinthian Colleges, ITT Tech were two big names. And this left hundreds of thousands of borrowers with big debts and degrees that they say are basically worthless. So the students started protesting, saying they deserve to have their debts erased. And you have to remember, because we're talking about federal student loans, the decision of what to do about those loans is really up to the U.S. Department of Education.

So ultimately, the Obama administration urged these students to file claims under an old rule known as borrower defense, which basically says if you think you were defrauded, state your case and maybe you'll get your money back.

INSKEEP: You obtained documents then saying what Education Department officials thought of those requests for forgiveness.

TURNER: That's exactly right. So in early 2017 - this is just a few weeks, really, before Betsy DeVos is sworn in as secretary - a bunch of career staff at the department write these memos after reviewing thousands of these borrower defense claims. And they basically say, yeah, Corinthian and ITT schools misled borrowers, making promises about things like job prospects after graduation and the transferability of credits that just weren't true.

And so these department staff say in these memos, we agree with these students. The value of an education from these schools is, quote, "either negligible or nonexistent." So the memos even quote defrauded borrowers. One of them says, I cannot find a job using my degree. People just laugh in my face.

INSKEEP: Wow.

TURNER: So these memos officially recommend to the department a sweeping approach to relief. All of these borrowers, they say, deserve to have their debts wiped out.

INSKEEP: I guess we got to take that present tense and put it in the past tense. You said these memos recommend. These memos recommended almost three years ago that these loans be forgiven. What happened?

TURNER: They did. And this fight has been playing out ever since because Secretary DeVos comes in and, over the course of the past three years, has made it clear she does not like this full-relief approach to borrower defense. She has called it easy money. And so instead - in fact, just yesterday, she unveiled a new approach to grant students, essentially, partial relief.

Her reasoning is even if students were lied to, what the department still doesn't dispute, if they're working now and earning a respectable living, why should they get the money back? That's what the department now argues. In a statement to NPR, a department spokesperson said, quote, "full relief sounds nice. To force taxpayers to provide blanket forgiveness, though, would be abandoning our duty to be good stewards of tax dollars."

The department, they say, will provide student loan relief to those who qualify. And we should say, you know, this fight is going to play out on a very big stage tomorrow. DeVos is scheduled to testify before the House Education Committee.

INSKEEP: We'll be listening. Cory, thanks so much.

TURNER: Thanks, Steve.

INSKEEP: That's NPR's Cory Turner.

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