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 defense group discharges for former Westwood College and ITT Tech students. This relief will help tens of millions of students, especially those who were defrauded by the unscrupulous for-profit college industry.
Unfortunately, the outspoken critics of President Joe Biden’s move have ignored the harm of this industry and forgotten the role our federal government played in pushing students toward predatory for-profit colleges.
These institutions siphoned off federal dollars without delivering meaningful degrees. What’s worse, their students were often forced to drop out before earning a degree, and those who did graduate often found their degree to be worthless in obtaining gainful employment. These students, who borrowed $40,700 on average, are still on the hook for these costs, even if they didn’t complete their program.
Despite this well-documented history of abusing students and taxpayers, 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 in perspective. For-profit colleges enroll only 8% of college students, yet they account for 30% of all student loan defaults. These schools often lure in first-generation students, those from low-income communities, and veterans, through aggressive marketing and — the clincher — federal loans and grants, which create an aura of authenticity and demonstrate government endorsement.
While under-delivering academically, these schools rake in Veterans Administration benefits, Pell Grants and federal student loans, using these federal dollars to market their substandard education and spending more than 20 times the amount public colleges and universities spend on advertising. Not surprisingly, 71% of students do not graduate on time or at all.
Meanwhile, executives line their pockets via federal student aid. Student outcomes don’t matter, as long as owners and executives got their payday.
Extensive investigations have revealed the worst offenders: ITT Tech, DeVry University, Westwood College and Corinthian Colleges. DeVry promoted false high job placement rates. Corinthian gave the false impression it was endorsed by the Department of Defense by illegally using military seals. Westwood deceitfully promised to help pay the bills of a graduate who did not find a job within six months of graduation. All these claims were lies.
The shams largely escaped scrutiny because for-profit colleges made friends in high places.
The Obama administration started to require accountability through measures such as the Gainful Employment rule, which forced non-degree granting programs at these schools to prove that graduates could find gainful employment in their field in order to receive federal student aid. The Obama Department of Education even set up an interagency task force to share information and coordinate oversight.
But under the Trump administration, lapdogs — fresh from the payrolls of the very schools they were supposedly policing — replaced the watchdogs. Former Secretary of Education Betsy DeVos hired top officials who had worked for the for-profit industry, clearly showing her priority was not to protect students.
In fact, under DeVos, the Education Department stopped processing borrower defense applications, allowing the backlog to soar to nearly 230,000. After a lawsuit filed by 23 state attorneys general forced DeVos to process the backlog of applications, she issued blanket denials. Borrower defense was the necessary relief for defrauded students, but DeVos saw it as “free money.”
Thankfully, the Biden administration has heeded my advice as I’ve pushed for student loan forgiveness for students scammed out of an education and into mountains of debt. It’s been nearly a decade, but we are finally seeing progress.
Under Biden’s student loan debt relief plan, the Education Department will be publishing an annual watch list of programs with the worst student loan debt levels — accountability that is much needed. I anticipate many of the worst actors in the for-profit college industry will make this list.
Detractors of Biden’s plan will argue debt forgiveness will cost our country too much. But what they won’t remind you is that the Congressional Budget Office’s price tag is an estimate of the impact across three decades, adjusted into a one-year, one-time number of $400 billion. Unlike Trump’s tax breaks for corporations and the wealthiest individuals, which cost nearly $2 trillion, Biden’s proposal delivers breathing room for working families.
Those who previously were struggling with student debt — many of whom attended fraudulent for-profit colleges — can now start a business, finally buy their first home or just pay their electric bill on time. It’s helping everyday 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 plan were duped by the false promises made by the pigs in higher education, wearing lipstick provided by Uncle Sam.
Sen. Dick Durbin is a Democrat from Illinois.
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