“You have someone who was in the middle of the fraud era of DeVry now in charge of enforcing a rule that was designed to do precisely what has just been done to DeVry: to better regulate them and monitor them,” said Tressie McMillan Cottom, an assistant professor of sociology at Virginia Commonwealth University and expert on for-profit colleges. Cottom pointed, in particular, to regulations published at the tail end of Obama’s presidency aimed at protecting student borrowers against fraudulent higher-education institutions. (Schmoke himself has not been accused of any wrongdoing, nor implicated in those alleged practices by any public report.)
The enforcement unit was formed by the Obama administration in February of 2016 in an effort to more efficiently and effectively respond to the types of allegations DeVry has faced, including claims from students requesting that their loans be discharged through what’s known as borrower defense. “Let me be clear,” former Education Secretary John King said at the time of the unit’s creation, “schools looking to cheat students and taxpayers will be held accountable.”
While the enforcement unit is designed to stamp out illicit practices at all kinds of higher-education institutions, including nonprofit and public ones, it was expected to focus on for-profit institutions given their disproportionate tendency to engage in such practices.
The Trump administration has made a systematic effort to undo Obama-era initiatives, particularly those that sought to ramp up regulation of private institutions. It’s long been expected that Trump would target policies pertaining to for-profit colleges—in fact, several for-profit institutions, including DeVry, saw a noticeable bump in their stock values the day after the election. A few months ago, the Education Department moved to delay implementation of the borrower-defense rule—a development that prompted attorneys general for well over a dozen states to sue Secretary Betsy DeVos.
“This can definitely be seen as further evidence of the Trump administration, and DeVos in particular, [practicing] favoritism toward for-profit entities and for-profit education, which is a move away from [higher education’s] historic mission … of being a nonprofit that reinvests in its entities,” said Linda DeAngelo, an assistant professor of higher education at the University of Pittsburgh who has conducted research on for-profit colleges. (While DeAngelo argued that, taken in aggregate, for-profit colleges are problematic because of their tendency toward predatory practices, she has also found a range of outcomes among students enrolled at such institutions. “Students can sometimes have very good experiences even in bad environments,” she said.)
In a press release sent out Thursday, the Education Department confirmed Schmoke’s hiring as part of a larger announcement that it will be expanding its focus on enforcement and consumer protections. A. Wayne Johnson, the chief operating officer of the Federal Student Aid office, in a statement said he’s intent on preventing “bad actors” from harming students, parents, borrowers, and taxpayers. “We will enforce what is right for students at every turn of their student aid life cycle,” he said. And if the office, through its enforcement unit, determines that a higher-education institution is out of compliance, it will either bring that institution into compliance or revoke its access to federal student aid.