Students ripped off by for-profit schools will benefit the most from Biden’s loan cancellation plan

In August, I joined the chorus of gratitude when the Biden administration issued up to $20,000 in federal student loan forgiveness in addition to finally issuing borrower advocacy group waivers for former Westwood students. College and ITT Tech. This relief will help tens of millions of students, especially those who have been defrauded by the unscrupulous for-profit university industry.

Unfortunately, vocal critics of President Joe Biden’s decision have ignored the wrongdoings of this industry and overlooked the role our federal government plays in pushing students into predatory, for-profit colleges.

These institutions siphoned off federal funds without issuing meaningful degrees. Worse still, their students were often forced to drop out before graduating, and those who did graduate often found that their degree was worthless for gainful employment. These students, who borrowed $40,700 on average, are still responsible for these costs, even if they have not completed their program.

Despite this well-documented history of student and taxpayer abuse, the federal government has blessed and funded the for-profit college industry, and therefore shares some of the blame for allowing these colleges to thrive.

Let me put this into perspective. For-profit colleges only enroll 8% of students, but they account for 30% of all student loan defaults. These schools often attract first-generation students, those from low-income communities, and veterans, through aggressive marketing and—the deciding factor—federal loans and grants, which create an aura of authenticity and demonstrate approval. of the government.

Although underperforming academically, these schools reap the benefits of Veterans Administration, Pell Grants, and federal student loans, using those federal dollars to market their substandard education and spending more than 20 times the how much public colleges and universities spend on advertising. Unsurprisingly, 71% of students don’t graduate on time or at all.

Meanwhile, executives line their pockets on federal student aid. The results of the students do not matter, as long as the owners and managers receive their salaries.

Thorough investigations revealed the worst offenders: ITT Tech, DeVry University, Westwood College, and Corinthian Colleges. DeVry promoted fake high placement rates. Corinthian gave the false impression that it was endorsed by the Ministry of Defense by illegally using military seals. Westwood deceptively promised to help pay the bills of a graduate who couldn’t find a job within six months of graduation. All of these claims were lies.

Mocks have largely escaped scrutiny because for-profit colleges have made friends in high places.

The Obama administration began to demand accountability through measures such as the Paid Employment Rule, which required non-degree programs at these schools to prove that graduates could find gainful employment in their field in order to receive federal student aid. Obama’s Department of Education even set up an interagency task force to share information and coordinate oversight.

But under the Trump administration, watchdogs — fresh off the payrolls of the very schools they were supposed to oversee — have replaced watchdogs. Former education secretary Betsy DeVos hired senior officials who had worked for the for-profit industry, making it clear her priority was not protecting students.

In fact, under DeVos, the Department of Education stopped processing borrower defense applications, allowing the backlog to soar to nearly 230,000. After a lawsuit by 23 state attorneys general States forced DeVos to deal with the backlog of claims, she issued blanket denials. Borrower defense was needed relief for defrauded students, but DeVos saw it as “free money.”

Fortunately, the Biden administration heeded my advice as I pushed for the cancellation of student loans for students ripped off from an education and in mountains of debt. It’s been almost a decade, but we are finally seeing progress.

As part of Biden’s student loan debt relief plan, the Department of Education will release an annual watchlist of programs with the worst levels of student loan debt — an accountability that is much needed. I predict that many of the worst players in the for-profit academic industry will make it onto this list.

Critics of Biden’s plan will say debt cancellation will cost our country too much. But what they won’t remind you of is that the Congressional Budget Office’s price is a three-decade estimate of the impact, adjusted to a single figure of $400 billion over one year. Unlike Trump’s tax breaks for the wealthiest corporations and individuals, which cost nearly $2 trillion, Biden’s proposal provides respite for working families.

Those who previously struggled with student debt — many of whom attended fraudulent for-profit colleges — can now start a business, finally buy their first home, or simply pay their electric bill on time. It helps ordinary Americans live a little easier.

I leave the critics of student loan forgiveness with this: remember that many of the student borrowers who will benefit most from Biden’s debt relief package have been duped by the false promises made by the pigs of the higher education, wearing lipstick provided by Uncle Sam.

Senator Dick Durbin is a Democrat from Illinois.

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