Betsy DeVos Dumps Trump, Leaving Controversial Student Loan Legacy Behind

WASHINGTON, DC – DECEMBER 12: U.S. Secretary of Education Betsy DeVos testifies during a hearing … [+] before House Education and Labor Committee December 12, 2019 on Capitol Hill in Washington, DC. The committee held a hearing on “Examining the Education Department’s Implementation of Borrower Defense.” (Photo by Alex Wong/Getty Images)
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Education Secretary Betsy DeVos has resigned from President Trumps cabinet in response to the violent January 6 mob attack on the United States Capitol, which was incited by President Trump.
In a letter to the president, DeVos wrote, We should be highlighting and celebrating your administrations many accomplishments on behalf of the American people… Instead, we are left to clean up the mess caused by violent protesters overrunning the U.S. Capitol in an attempt to undermine the peoples business…. That behavior was unconscionable for our country. There is no mistaking the impact your rhetoric had on the situation, and it is the inflection point for me.
Betsy DeVos has been a controversial figure as President Trumps Secretary of Education. Consumer rights advocates and student loan borrowers have been highly critical of Secretary DeVos during her four years leading the Department and managing its vast student loan portfolio. DeVos and her administration are currently embroiled in multiple lawsuits some of which have been ongoing for years involving the handling of numerous student loan programs.
One of DeVoss biggest controversies has been her handling of the Borrower Defense to Repayment program. The Obama administration enacted regulations governing this loan forgiveness program in 2016 to provide student debt relief to students who were misled, defrauded, or otherwise harmed by predatory colleges and universities often, for-profit schools. Under Secretary DeVos, however, the Department of Education rewrote the rules governing the program. These new regulations substantially weaken the Borrower Defense relief provided to student loan borrowers by increasing the burden of proof required to prevail, and imposing a strict statute of limitations.
Borrower advocates previously accused DeVos and the Department of Education of deliberately holding up the processing of nearly 170,000 Borrower Defense applications, in some cases for years; she was later found in contempt of court for continuing collections actions against borrowers while their applications were pending. A whistleblower later accused DeVoss administration of intentionally making it harder for student loan borrowers to apply for relief. And after a tentative settlement agreement was reached that would force the Department to process the remaining Borrower Defense applications, her administration issued blanket denials to tens of thousands of student loan borrowers in some cases, without any clear, logical reasoning. These matters continue to be litigated in federal court.
DeVos has also been criticized for her implementation of the CARES Act, which suspended all federal student loan payments and collections efforts in response to the ongoing pandemic. Student loan borrowers filed a class-action lawsuit against DeVos, accusing her of failing to comply with the CARES Acts mandated collections suspension by continuing to garnish borrowers wages, in some cases for months after the CARES Act went into effect. In response to another class-action suit brought by student loan borrowers, the Department disclosed that it had intercepted and seized over $2.2 billion in tax refunds owed to a million student loan borrowers, potentially in violation of the CARES Act.
DeVos has also come under fire for her handling of federal student loan servicing. Early in DeVoss tenure, she rescinded Obama-era guidance that had been put in place to create greater accountability for student loan servicers that had poor outcomes. Since then, a recent report uncovered over 5 million student loan servicing errors that could cause lasting financial harm to student loan borrowers, particularly for borrowers seeking relief through the Public Service Loan Forgiveness (PSLF) program. Another report issued last year by the Department of Educations own Office of Inspector General found ongoing and systemwide failures by federal student loan servicers. That report blamed both the servicers themselves and the U.S. Department of Education for its failure to hold them accountable.
During her final weeks in office, DeVos railed against proposals to forgive student loan debt and make college free for some students. “Across-the-board forgiveness of college debts is not only unfair to most Americans, it is also the most regressive of policy proposals rewarding the wealthiest sector of our labor force at the expense of the poorest,” DeVos wrote in a recent letter.
Defenders of DeVos have pointed to changes and improvements she has made to certain federal loan programs, such as the creation of the Public Service Loan Forgiveness (PSLF) Help Tool and coordinated outreach efforts to borrowers regarding eligibility for that program. However, PSLF still has a denial rate hovering at around 98%.
Betsy DeVos has never done her job to help Americas students, said Senator Elizabeth Warren (D-MA) in response to DeVoss resignation. It doesnt surprise me one bit that shed rather quit than do her job… Good riddance, Betsy. You were the worst Secretary of Education ever. Warren has been one of DeVoss fiercest critics.
Biden announced in December that he plans to nominate Dr. Miguel A. Cardona to replace DeVos as Secretary of Education. Cardona currently is the Connecticut Education Commissioner, and has three decades of experience as a public school teacher and administrator. DeVos had no such experience. Cardona would be the first Latino to lead the U.S. Department of Education.
“In Miguel Cardona, America will have an experienced and dedicated public school teacher leading the way at the Department of Education ensuring that every student is equipped to thrive in the economy of the future, that every educator has the resources they need to do their jobs with dignity and success, and that every school is on track to reopen safely,” Biden said in a statement last month.
The Betsy DeVos era at the Department of Education is over, and so are her attacks against students, parents, and student loan borrowers, said Natalia Abrams, executive director of Student Debt Crisis, earlier in December. The nomination of Miguel Cardona for Education Secretary brings the prospect of hope that existing student debt relief programs will be implemented as the law intended.
This is a new day for student borrowers, said the Project on Predatory Student Lending in an earlier statement. For too long, for-profit students voices and legal rights have been ignored by the Secretary of Education. We have every hope that will change under Secretary Miguel Cardona. The Biden-Harris administration, under the leadership of new Secretary Cardona, has the opportunity to listen to for-profit college students and make a difference for them on Day One.
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