Updated July 30, 2018
This week, advocates for student-loan borrowers have seen some of their worst fears come true. More than a year after Education Secretary Betsy DeVos announced that the U.S. Department of Education would begin to unwind two Obama-era regulations aimed at holding for-profit colleges accountable, the department has started to make good on that promise. One of the regulations is being scaled back significantly; the other is reportedly going to be eliminated altogether.
When the Education Department announced, in June 2017, that it would begin the process of rewriting the rules, borrower advocates saw it as evidence of a coziness with the for-profit sector. Several staffers who had relationships with for-profits were forced to recuse themselves from working on regulations such as these. But now it has come to light that in the early days of Donald Trump’s education department at least one official was communicating with his contacts in the for-profit industry while also eagerly seeking to discuss the two rules now being rolled back.
The two regulations are known as the “borrower defense” and “gainful employment” rules. Borrower defense provided students a streamlined path to debt relief if they were defrauded by their college; the 2016 rule was rolled back before it even took effect. The gainful-employment rule sought to cut off federal loans to schools if their students did not make enough money after graduation to pay them off. Both regulations were an attempt by the Education Department under President Barack Obama to protect students from fly-by-night colleges in the for-profit sector.