Remember when candidate Trump promised to make college affordable for everyone? Yeah, that’s not happening.
Instead, Trump is turning to the notorious corporateers who have been pouring McDiplomas on the nation’s steaming trillion-dollar student debt pyre to shake up higher education.
Education Secretary Betsy DeVos’s controversial pick for a special assistant—for-profit college corporate lawyer Robert Eitel, may be a portent. As counsel for Bridgepoint, the parent company of the now-tainted brands of Ashford University and University of the Rockies, was forced by the Obama administration last year to refund $24 million in tuition and debt costs to students, plus civil damages, after the Consumer Financial Protection Bureau found that its heavy marketing scheme for its online programs, and “deceived its students into taking out loans that cost more than advertised.”
Bridgepoint is just one player in a sector of for-profit institutions that are known for exploiting millions in federal loans and grants, providing substandard academics and granting worthless diplomas. While many companies were reined in by regulators under Obama, the industry as a whole has survived, and is now poised for revival under Trump. In fact, even those companies penalized for defrauding students have not been held fully accountable over federal student debts; Bridgepoint’s sanction, for example, did not encompass federal loans, even though graduates are typically chained to about $33,000 in taxpayer-subsidized debt.
But the for-profit college companies hobbled by financial crisis under Obama might see a major resurrection under Trump’s and DeVos’s deregulatory agenda.
One tactic may be for belly-up for-profits to reinvent themselves as nonprofits, in order to skirt future regulations and wriggle out of liability for financial abuses. The Corinthian college chain, for example, following bankruptcy, was placed under the control of a nominal “nonprofit” called Zenith (which was later exposed for having compromising financial entanglements despite purporting to act as an independent monitor). Yet countless former students remain trapped in devastating debt, after regulatory pressure and lawsuits forced the company into bankruptcy and left over 15,000 in the lurch as campuses were shuttered nationwide. Despite their ongoing financial strife and an angry debt strike campaign led by the Debt Collective, the Obama administration never provided full debt relief. And with education policy controlled by a billionaire who himself has dabbled in the education-marketing industry with the shuttered Trump University, there’s no relief in sight for current debt holders and even worse prospects for meaningful protections for future student debtors.