TRUMP AND BETSY DEVOS DELIVER A ONE-TWO PUNCH

Since 2007, the federal student loan forgiveness (PSLF) program has been an escape hatch for law graduates (and others) saddled with overwhelming educational debt. The idea was that the graduate would take a public service job at low pay and reduced monthly loan requirements. After ten years of service, any remaining loan debt was forgiven. The well-known backstory is that student loans are not dischargeable in bankruptcy. They can follow a person to the grave.

There were and still are problems with PSLF, such as the resulting tax on the imputed income from the forgiven loan. And 10 years is a long time to toil in low wage positions. But the country and many recent graduates have been the better for it.

New Problems

Serious administrative issues surfaced when the ABA sued the Department of Education for retroactive denials to lawyers who thought they were employed in qualifying PSLF programs. After original approval, the suit alleged, the department then reneged and said, in effect, “No soup for you.”

According to one report, “The ABA, which views the program as an essential part of its recruiting and retention efforts, was only informed that it was no longer an eligible employer for PSLF purposes earlier this year – nine years into a 10 year program. The association has lost employees who were in the program and has been told by possible hires that the loss of qualification was an important factor in not joining the ABA.”

Problems Solved, Trump-Style

For young lawyers hoping that public service loan forgiveness was the answer to a lifetime of student debt burdens, Trump has some bad news. Rather than remedy the problems with a program that can provide enormous help to many recent grads and the organizations for which they work, he wants to eliminate it altogether. It’s analogous to his approach to the Affordable Care Act. Fixing something is more difficult than eliminating it altogether. So Trump proposes to eliminate it.

Amid the attention surrounding Trump’s scandals involving Russia, obstruction of justice, and business conflicts of interest, many important stories got lost. What’s happening in the U.S Department of Education is one of them. On May 17, The Washington Post reported, “Funding for college work-study programs would be cut in half, public-service loan forgiveness would end and hundreds of millions of dollars that public schools could use for mental health, advanced coursework and other services would vanish under a Trump administration plan to cut $10.6 billion from federal education initiatives.”

Why? Because Education Secretary Betsy DeVos’ lifelong mission has been to promote private and religious schools. According the Post story, she seeks to put $400 million into expanding “charter schools and vouchers for private and religious schools, and another $1 billion to push public schools to adopt choice-friendly policies.”

Who’s Affected?

By the end of 2016, 550,00 people had been approved for the federal loan forgiveness program. The first beneficiaries of the program will receive their rewards this year. If Trump and DeVos have their way, they will become the vanguard of a dying breed. Trump and DeVos are not just throwing out the baby with the bathwater; they’re ripping out the tub and all of the plumbing, too.

STUDENT LOANS AND BETSY DeVOS

Into the teeth of the student loan crisis walked Trump’s Secretary of Education Betsy DeVos. She’s already making it worse.

The problem goes far beyond DeVos’ embarrassing ignorance on display at her confirmation hearing, Her main qualification for Trump’s cabinet appears to have been her status as a Republican billionaire-donor. She knows nothing about basic educational policy, the decades-old Individuals with Disabilities Education Act, fraud by for-profit colleges and graduate schools exploiting students, or any other subject about which an aspiring Secretary of Education should have at least some rudimentary knowledge.

Why DeVos?

None of DeVos’ shortcomings kept Trump Party senators from confirming her. With an expertise in lobbying, she pushed Michigan money away from public education and into charter schools that had little or no accountability for their dismal performance. And Michigan now leads all states in the number of charter schools operated for a profit.

For law students, DeVos’ actions in Michigan are more than just a troubling analogy. In an earlier post, I wrote about Jerry Falwell Jr., the president of Liberty University, which has a marginal law school. His newest assignment is leading Trump’s task force on deregulating higher education. Most law schools — especially those whose graduates have the toughest time finding meaningful JD-required jobs — love the idea of deregulating an already dysfunctional market that props them up.

Law School Winners

If marginal schools had to operate in a completely competitive market, many would have closed their doors long ago. As they lowered admission standards and admitted students who produced declining bar passage rates, federal student loan dollars have kept them afloat. Trump embraces deregulation as a panacea. But that’s because, as with so many things, he lacks an understanding of how the absence of regulation would make the currently dysfunctional market in legal education even worse.

Only federal student loans keep the worst law schools in business. Educational debt is not dischargeable in bankruptcy, and federal guarantees add another layer of protection for schools that don’t deserve it. Meanwhile, schools themselves have no accountability for their students’ poor bar passage rates or dismal employment prospects.

The Obama administration had been making life more difficult for schools that exploit students and leave them deeply in debt from which many will never recover. Specifically, schools that grossly underperformed for their students faced the prospect of losing eligibility for the federal student loan program. Charlotte Law School felt that heat directly.

The Other Shoes Dropped

Less than a week after Falwell’s task force appointment, Vice President Mike Pence’s tie-breaking vote in the Senate confirmed Devos as Secretary of Education. Immediately, she chose advisers:

— Robert S. Eitel, an attorney, is on unpaid leave of absence from his job as a top lawyer for Bridgepoint Education, Inc., a for-profit college operator whose stock is up 40 percent since November 9. Bridgepoint faces multiple government investigations, including one that ended in a $30 million settlement with the federal Consumer Finance Protection Bureau over deceptive student lending.

— Until July 2016, Taylor Hansen was a lobbyist for the Association of Private Sector Colleges and Universities, the largest trade group of for-profit colleges. In June 2016, his mission was to eliminate the government’s “gainful employment” rule, which can cost a school federal funding if too many of its recent graduates fail to repay their student loans. But then Hansen became a DeVos adviser and a member of the Education Department’s “beachhead” team — a group of temporary employees that doesn’t require Senate approval. On March 6, the Department announced a three-month delay in deadlines associated with the gainful employment rule.

On March 14, ProPublica reported on Hansen’s unseemly status. On March 20, Sen. Elizabeth Warren sent the ProPublica article with a letter to DeVos asking for an explanation. Hansen resigned the same day.

Bottom line: If you’re counting on help in dealing with the worsening student loan crisis, count the Trump administration out.