I’m getting so sick of reporting on Betsy DeVos’s destructive decisions, but unfortunately, each week sees her advocating another ridiculous policy agenda that hurts ordinary Americans, and especially those buried in excessive student loan debt.
On Friday, September 1st, DeVos’s Department of Education announced that they’re cancelling all cooperation with the Consumer Financial Protection Bureau to monitor student loan fraud.
Which makes sense, right, because I can’t think any good reasons why we’d want our Government attempting to prevent student loan fraud.
I mean, why would we waste energy on that when we could instead turn a blind eye to the biggest financial bubble in world history and allow for profit schools, hedge fund investment bankers and massive student loan servicing companies to bilk TRILLIONS of dollars from ordinary Americans?
Isn’t that what powers our modern economy?
Betsy DeVos is NOT Looking out for You
I can’t imagine a single reason why Secretary DeVos thinks this is a good idea to kill the Education Department’s cooperation with CFPB, oh, other than the fact that she is connected to a very large student loan servicing company (through family ties) who may want to continue engaging in the very same sort of fraud that the DOE and CFPB have been attempting to prevent… but I digress.
Since Betsy DeVos is the Secretary of Education, she gets to set public policy, and apparently President Trump, who I previously thought could become the first Student Loans President (I’ve completely given up on that fantasy, by the way), is apparently on board with Mrs. DeVos’s ridiculous ideas, because he hasn’t said a single negative thing about her leadership since she took the helm.
Anyway, that’s enough about the Dear Leaders for now, let’s focus on what this partnership was, and what losing it is going to cost the average American.
What Were DOE and CFPB Doing Together?
The student loan fraud monitoring partnership between the Department of Education and the Consumer Financial Protection Bureau was established way back in 2011, reaffirmed in 2013, and was created to allow the CFPB to collect DOE consumer complaints about student loan companies and student loan servicers.
Based on the original agreement, CFPB was supposed to collect these complaints, sift through them to determine which needed to be pursued, then pass them along to the Department of Education within 10 days of receiving them.
This was supposed to streamline DOEs ability to respond to complaints, and actually start policing the evil schools, financial institutions and loan servicing companies scamming the American taxpayer.
In the beginning, CFPB kept up their part of the deal, but when DOE kept refusing to actually do anything about the complaints they were receiving (they were too busy, apparently), CFPB began pursuing the complaints themselves, and going after the for-profit schools, the lenders, and the servicers who were obviously committing fraud and all sorts of other illegal activity.
Is There Any Evidence of this Agreement Working?
ABSOLUTELY!
If you’ve been following the student loan industry in the past several years, then you’d be familiar with the fact that the CFPB is one of the ONLY organizations actually doing anything to help people like you and me, by filing lawsuit after lawsuit against these terrible companies that care nothing about education, and only about their bottom line.
Along with the FTC, CFPB has lead the charge against fraudulent activities, filing or helping with lawsuits against some of the industry’s biggest players, including DeVry, ITT Tech, Corinthian Colleges, FedLoan, Navient, Aequitas Capital and the National Collegiate Trusts.
And these aren’t little lawsuits, but huge, massive, multi-million and sometimes even BILLION dollar attacks on the worst of the worst in the higher education industry; the people inflating the student loan debt bubble, and literally threatening our entire economy by inflating the debt bubble so high that Americans can’t afford to buy new homes, new cars, and the things that really power our economic growth (unlike low-quality, ridiculously-overpriced education programs!)
Want to see the Proof?
For details on any of the major successes the CFPB and FTC have had in recent years, be sure to check out the following pages of my site, where I go into detail about what some of the industry’s biggest companies have been accused of, what the potential penalties they might face, and what student loan forgiveness or refund benefits may look like for those impacted by their illegal behavior:
- The DeVry Student Loan Forgiveness Program
- The ITT Tech Student Loan Forgiveness Program
- The Corinthian Colleges Student Loan Forgiveness Program
- The FedLoan Student Loan Forgiveness Program
- The Navient Student Loan Forgiveness Program
- The Aequitas Capital Student Loan Forgiveness Program
- The National Collegiate Trusts Student Loan Forgiveness Program
According to Betsy DeVos, What Did the CFPB Do Wrong?
It’s pretty simple really, and sounds just like the sort of thing a completely inept, useless and jealous person would accuse a successful person of doing: Secretary DeVos has accused the CFPB of getting stuff done… without asking permission beforehand!
The Education Department is now refusing to work with and share data with the CFPB simply because the CFPB stopped handing complaints back to DOE (who wasn’t doing anything with them), and pursuing them itself, taking the bad actors to task, shutting them down and prosecuting their illegal behavior!
Per DeVos’s decree, the CFPB violated their original agreement with DOE because they were attempting to address the complaints on their own, which technically, they weren’t authorized to do (per DeVos, I don’t know if that’s actually true or not).
Why I Completely Disagree with This Accusation
Personally, having followed the industry for a decade now, I feel pretty confident in my ability to read the value of each organization involved, and determine where the problems truly lie… and I would argue that the CFPB is the best possible organization to pursue these complaints because they were truly looking out for borrowers, and actually getting things done.
Compared to the DOE, who has done nothing but sit on their hands and ignore the massive problems in the student loan lending and servicing industry, CFPB accomplished some major wins in recent years.
Obviously, this struck a nerve with the Department of Education (read: Betsy DeVos), because it jeopardized the business operations of her colleagues, friends and family members, who just may have relied on corruption to pad their bottom lines…
Proof that DOE is Way out of Line
If you need proof that this whole thing is a procedural joke and that the DOE is making a huge mistake, then just take a look at their statement on why they’re severing ties with CFPB:
[DOE] “takes exception to the CFPB unilaterally expanding its oversight role to include the Department’s contracted federal loan servicers… characteristic of an overreaching and unaccountable agency… using the [Education] Department’s data to expand its jurisdiction into areas that Congress never envisioned…”
Sounds just like the sort of thing a corrupt, negligent, paranoid, control-freak, would say when someone new comes in and does a significantly better job accomplishing the assignments that were being ignored before, right?
Unfortunately, there’s nothing the Consumer Financial Protection Bureau can really do about this; they’re basically shut out from the data and details they needed to pursue consumer complaints, since it was data collected and stored by DOE, then shared with them.
Where Does This Leave Us?
It’s sad, but Republican lawmakers and many conservative business-leaders across the country have continued to criticize the CFPB for their work, claiming that CFPB is violating congressional mandates, attacking lenders and companies without following due process laws, but like I said before, CFPB has been one of the only groups that’s done anything at all in recent years to address the many rampant issues plaguing the student loans industry.
If I were in charge, I’d ask these critics to go fly a kite, while I pumped up funding to the CFPB. Oh, but I’d do all that after firing Betsy DeVos first, as she’s so obviously out of touch with the needs of ordinary Americans and so far over-head-head in this position that it’s probably the single-worst Presidential Cabinet appointment in history.
Did I mention I’ve got a Political Science background too? This is no joke… I would bet money that in 100 years, historians will STILL be talking about Trump’s decision to appoint her as being one of the worst in the history of the United States.
My Take… For What It’s Worth…
I’ve said it before, but I love a good conspiracy theory, and in DeVos’s behavior I continue to see the exact same signals that she started sending out very early in her tenure as Secretary of Education: this woman is corrupt as hell, and will stop at nothing to help pump more money into the pockets of her friends and family members.
The ONLY reason I could see Betsy DeVos making this move is because she doesn’t want her cronies… I mean friends and family members… to get exposed for running the sorts of scams they’ve been getting away with for years, lending high-cost loans to people who don’t need them, pumping out worthless higher education degrees that do nothing to help the people that pay for them, and crushing the financial futures of borrowers by intentionally screwing up their student loan servicing.
What do ACTUAL Experts Think?
I’m just a guy with a Blog, so let’s look at what some of the actual industry-experts think.
Fortunately I’m not at all alone in my analysis, as one of the industry’s most highly intelligent, well-connected expert, Persis Yu, director of the National Consumer Law Center’s student loan borrower project, had this to say about Betsy DeVos’s latest move:
“DeVos is prioritizing the interests of predatory for-profit schools, debt collectors, and troubled student loan services over the interests of student loan borrowers.”
Persis Yu wouldn’t say something like this without very good reason to do so, as it’s not generally a good idea to make enemies with the Secretary of Education, when your entire organization and employment literally rely on the industry that they control.
Why Do I Give Betsy DeVos Such a Hard Time?
Not only has Betsy DeVos ruined the CFPB partnership that’s been so fruitful in fighting back against corrupt student loan companies, but she’s also already attempted to cancel the Public Service Loan Forgiveness Program, and pause Borrower’s Defense to Repayment Benefits.
But that’s not all, because just this week, she also announced that she was appointing one of the old DeVry University officials to take charge of the Education Department’s enforcement division!
That’s the very same DeVry, by the way, who was fined $100,000,000 (ONE HUNDRED MILLION DOLLARS!) for scamming millions of Americans out of their hard-earned money via false advertising.
The same DeVry who had to be shut down forcefully because they cared so little about providing any educational value to their students.
The same DeVry who only existed to maximize profits, NOT to provide any useful education programs.
So for those of you who haven’t been following any her moves closely enough, or who have skipped to the bottom of this post, here’s the TLDR:
The United States Secretary of Education Betsy DeVos is the student loan community’s public enemy number 1.
If you have student loan debt, you should not support anything that Betsy DeVos proposes. In fact, you should do everything that you can to resist her policy objectives.
Betsy DeVos is a poison pill, and her initiatives are designed to make the student loan crisis worse for you, your friends and your family.
Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.
By: Tim Marshall
Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.
Dear Tim,
Hello, my name is Thomas and I am in need your help please with my recent experience at The Art Institute of Tampa.
I began attending the Art Institute of Tampa in the Fall Quarter of 2017. Previously, I attended Hillsborough Community College with an interest in studying graphic design, which is what provoked me into considering the Art Institute.
After attending their well-crafted open house, and meeting with one of their counselors, I believed it a was a good fit for me. I was comfortable with the fact that they claimed they were an accredited school, coupled with the fact that they have so many campuses throughout the United States, and their promise to place students into internships and careers thereafter.
However, after attending the Art Institute of Tampa for three quarters it became quite clear that the instructors were not there to aid the student in becoming a successful graphic designer. In fact, more alarming was the fact that their equipment and curriculum was outdated, and staff was there to fail you as opposed to guiding you through your educational journey. And there was motive.
Motive- Financial gain – specifically generated by enrolling students with no regard to the fact that the school is closing and a degree from the school would be deemed worthless.
In three quarters the school charged me $ 17,000 as opposed to almost two years at HCC that only cost me $ 8,000.
This institution should be ashamed of their motives to trap students with a dream and harness their energy into a funnel of lies and deceit.
The degree has no credence. It has also haunted me financially, and emotionally. Quite frankly, I am now without a hope and dream for a future career. I am heart broken and financially burdened. I speak for many.
I feel it is unfair that they scam students with the hope of obtaining a legitimate degree which will aide them in a building a career. They shouldn’t still be open if it is publicly known that they do this sort of thing. I wish I had known all this before attending this place.
I am now in debt $ 17,000, have no viable alternative to get a degree from this institution that has any merit, and am emotionally stunned and stunted. Multiply that by the number of students that are still attending and have since graduated – a lot of money at the expense of helpless victimized hope filed students.
I cannot believe in today’s world that is so sensitive toward education that a higher learning institute would be allowed to conduct itself in such a manner and without any repercussions.
To put things into perspective- if Trump University was considered illegitimate, then The Art Institute is no different by definition and should be held liable for their emotional and financial abuse.
Your help in this would be greatly appreciated and forever remembered. Thank you for listening.
Respectfully,
Thomas
My story:
When I began at the art institute of Tampa they gave every new student a starter kit full of what was predominately out dated supplies. There were also many inconsistencies among each student’s kit. Through out the term when we would use certain tools from the kit every so often a student or two would find they weren’t given that specific tool and the teacher would just shrug and say I guess you must buy one or a response of that sort. So, basically the kits weren’t consistently put together just thrown together without much thought.
The classes themselves were extremely vague and simple in the sense that not much was ever taught or assigned. We would get projects assigned to us which generally where very basic and childlike, one at a time, and would sometimes have up to three or four weeks for each one in an eleven-week quarter. Not only that, but most of the time that we were in the four hours, once a week class, we would work alone on our project which would mainly just be surfing the web for pictures then manipulating them in Adobe Illustrator/Photoshop, essentially things that one could teach themselves just by doodling around on those software.
The teaching we received would last maybe thirty to forty mins at the start of a new project, not every class, and consisted of the instructor lifelessly siting at his desk with the Adobe software on the overhead, and he himself would just kind of doodle around in the software and make comments on the various things he was doing, coving maybe one twentieth of what we needed to know, then would leave the rest of it for us to do, not only that but we still had the project to complete. Then when we worked on our own for the rest of the classes the instructor would just sit at their desk on the computer. If anyone ever asked for help they would, but with a very short temper and a sarcastic attitude towards
There were only a handful of students at the school. In my first quarter, I had at the most ten to twelve classmates, the second quarter many of the classes had maybe only five students in them. Then the last quarter I was there one class literally only had four students in it including myself.
The instructors would take off your grade and treat you differently if your where five minutes late to a four-hour class, even if you had a legitimate excuse, like one girl in my class who had engine problems on her vespa scooter. The teacher was verbally condescending to her regarding the subject in front of the whole class. This was the same for absences. They would then have a lasting grudge against you even if you improved on your work or met the standards of the assignment. Often the professors would be vague on what they wanted out of an assignment/project. From one week to the next slight details wouldn’t be clear or would change and vary from student to student with the professor never giving a straight answer when students would ask them regarding specifics of the assignment, as if they where just winging or throwing together an assignment without any knowledge of how to teach a class, or how to inform and instruct beginners in the field of graphic design.
When assignments where turned in the grades would always be shockingly low even though all the criteria was met, and obviously visually on par, this was consistently same for most the students in the class as we would share amongst each other our grades. There was never a clear answer as to why the grades where so low and they would just brush you off in conversation vaguely changing the subject and telling to try harder on the next assignment. These where how the core classes where that had the same three instructors for all of them consistently.
The other classes where all electives and classes that gave your insight on the other majors there. These where all sleeper classes in the sense that the instructor would just sit at their desk, give short lectures then have you do simple assignments on the computer for four hours. Then give you good grades as long as you turned in the work without much regard to your work. Much opposite to the way the strict core class teachers where.
None of the classes period had any depth to them, nor did they teach you anything. We weren’t given the option of purchasing the text books they where included in the tuition which raised the price, when we rarely if ever used one. As for supplies, we had to constantly go buy basic materials which many of the students could barely afford on top of the already high tuition, which was also paying for the “supply kit” we received.
The school itself had a very run down feel inside, and many of the computer would malfunction or freeze up, sometimes causing a student to loose the project they had been working on and spending hours on, only for the instructor to shrug and say I guess try a different computer, its been a long day and that one is probably tired. The posters on the wall which displayed the explementary artwork of the students which they showed you on open house and on the tour to entice to to come to the school, stayed the same after three quarters of being at the school. Not to mention the one display area by the admissions office that did change every quarter had extremely mediocre and cheaply put together displays.
In summary:
• Negative environment, border lining on abuse that some of the instructors provided.
• The inconsistencies in practices used by the instructors where outdated from the seventies and eighties before the use of software-based programs.
• Expectations on projects and grading within the classes set you up for definite failure and would result in the student constantly retaking classes – driven by economic gain.
• They are there just for profit, with no regard to the student, or in giving them a legitimate education.
Hi Thomas,
Thanks for taking the time to provide so much detail in your comment! Here’s the thing though – based on what you wrote, I don’t think you’d get your BDAR application approved. Why? Because you don’t point out any specific instances where the school actually defrauded you or did anything illegal.
To get an approval for a Borrower’s Defense discharge, you literally must prove that the school violated some State or Federal law, like false advertising, making false promises, failing to live up to a contract, etc. What you’re talking about is a bad experience, sure, but you’re not accusing them of having violated any laws.
Your argument would be MUCH stronger if you could point to some specific instances of things they did that were literally illegal. My advice to you is to read my post about the Art Institute Lawsuit & Student Loan Forgiveness Program, and see if you can come up with some better examples where the school did something illegal to you personally.