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DeVos Confirmation Raises Concerns About For-Profit College Regulation

DeVos Confirmation Raises Concerns About For-Profit College Regulation.jpg

In January 2017, President Trump's team held a "listening session" in which they sought input from several colleges. A surprising invitee to this session was DeVry University, which a month earlier had agreed to pay $100 million to settle an FTC lawsuit that accused DeVry of deceptive advertising.

During President Obama's administration, the Federal Trade Commission and the Department of Education had targeted for-profit colleges like ITT, Corinthian College, and DeVry due to their high student loan default rates and their false and misleading advertising. Corinthian College and ITT both shut down. Things were not looking good for DeVry and other for-profit colleges as the federal government and the states were increasingly seeking to protect consumers (including active military and veterans) from fraudulent conduct.

Since Donald Trump was elected as president, for-profit colleges have seen a new day. This is due to an expectation that President Trump will roll back consumer-protecting regulations in favor of promoting for-profit schools. His actions supported this expectation when he nominated Betsy DeVos, an incredibly wealthy Republican fundraiser who has consistently advocated for federal funds to be directed toward for-profit schools.

During her confirmation hearing, Senator Elizabeth Warren questioned DeVos about whether she would enforce for-profit college accountability rules, including the gainful employment rule - which penalizes colleges who offer few job prospects yet leave students with insurmountable student loans. Ms. DeVos replied "We will certainly review that rule and see that it is actually achieving what the intentions are." To this, Senator Warren replied:

"I don't understand about reviewing it. We talked about this in my office. There are already rules in place to stop waste, fraud, and abuse, and I don't understand how you can not be sure about enforcing them. You know, swindlers and crooks are out there doing back flips when they hear an answer like this. If confirmed, you will be the cop on the beat, and if you can't commit to use the tools that are already available to you in the Department of Education, then I don't see how you can be the secretary of education."

Investors have overwhelmingly seen Donald Trump's election as great news for colleges like DeVry. In fact shares of publicly traded companies like DeVry, Strayer Education, and Grand Canyon Education all surged in the wake of his election. DeVry's stock jumped 40% between election day and February 2017. As an example, Market Research Analyst Sakshi Agarwalla recommended investment in DeVry as "an attractive value proposition" in part, because "a likely easing of regulation in the education sector under the Trump administration should further drive future growth opportunities" for the publicly traded company.

What is the takeaway from this? That for-profit colleges once again have the green light to prey on students. Now more than ever, if you have been exploited by a for-profit college, you need an attorney to protect your interests. Since 2008, attorneys Ari Moss and Jeremy Bollinger, at Moss Bollinger, have been working for consumers in their battles against big businesses. We want to use our knowledge and expertise to protect your interests from for-profit colleges. Call us today at 800-249-1175 for a free consultation or reach us online.

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