Lisa Madigan: Why I'm suing Betsy DeVos
Higher education is meant to provide economic opportunity to Americans—not provide unscrupulous companies the opportunity to syphon off billions in federal taxpayer dollars unfairly. Yet the illegal practices of the for-profit schools industry, including lying about accreditation and job placement, have lured millions of Americans to enroll in programs that ultimately leave them trapped in a lifetime of paralyzing student loan debt.
But even after such crooked and fraudulent practices were exposed, the new secretary of the U.S. Department of Education, Betsy DeVos, still has decided to eliminate reforms meant to stop this economic fraud.
The explosive growth of the for-profit school industry has had disastrous effects on millions of Americans and our economy. Over the last decade, total student loan debt has soared from $450 billion to more than $1.4 trillion, fueled significantly by expensive for-profit colleges that lure students into massive debt in exchange for an education that often leaves them unqualified for jobs in their fields. A 2014 study found that of the top 25 schools from which students hold the most student loan debt, over half were for-profit schools. In contrast, in 2000, only one of the top 25 schools was a for-profit institution.
The industry's fraud is well-documented. In response to complaints from students of rampant abuses, I investigated the worst for-profit schools, revealing predatory behavior and deceptive conduct. For-profit schools invested heavily in advertising and marketing—not education—and made false promises of future careers to prospective students in order to rake in billions of dollars in federal student loan money. These for-profit schools also regularly inflated job placement numbers, misrepresented their accreditation and promised career services' resources that did not exist.
The result for students: unmanageable student debt loads for educations that typically do not qualify them for a job in their field. Many of these students are effectively paralyzed by their student loan debt, impacting their credit and holding them back from fully participating in our state's economy by not being able to buy or rent a home, purchase a car, or start a family or business.
I successfully fought to close this industry's poorly accredited and underperforming schools and rein in their fraud and abuse. Unfortunately, the new administration is dismantling reforms and reverting to putting profits for unscrupulous corporations ahead of hardworking American students and taxpayers.
The latest example is Secretary DeVos' recent decision that will in effect rescind the Borrower Defense to Repayment Rule. This rule ensures that schools—not taxpayers—pay for fraudulent practices and bars schools that engage in fraud from receiving federal loan money. It also provides important protections for borrowers such as automatic loan forgiveness when a for-profit school closes before students can complete their degrees.
In Illinois, students who attended more than 50 campuses that closed in this manner would obtain relief. Now those students may never receive the relief they deserve and need to obtain a quality degree.
Along with 18 other state attorneys general, I am suing Secretary DeVos and the Department of Education for this dismaying decision that rewards for-profit schools' illegal and fraudulent behavior that has unquestionably failed both students and taxpayers. The Department of Education's refusal to oversee and hold for-profit schools accountable is a government-made disaster, and American students and taxpayers should not have to pay for it.