The good-faith efforts of the Obama administration to confront student loan debt has the real-world effect of bungling the chance at any positive change and making the system worse.
The approach to expand student loan forgiveness has been done “in perhaps the most ineffective — and costly — way imaginable,” according to The Hill.
“New rules issued by the Department of Education on Monday would allow current and former students to file claims for loan forgiveness if they felt their school made a ‘substantial misrepresentation’ regarding the school on its programs,” Brian Robertson wrote. “The Department of Education itself estimates that the proposed change to the ‘borrower defense to repayment’ regulation would cost taxpayers up to $43 billion over the next 10 years.”
That’s a far cry from discharging loan debt accrued by attending a fraudulent college. The Department of Education has lowered the bar from a scam to a disappointment. If a student feels they didn’t get enough out of a college education, they could see their loans forgiven — and taxpayers stuck with the bill.
It’s a weak standard couched in vague terms, which exacerbates the possibility for abuse.
“The language of the amended rule is so vague that it invites plaintiff’s attorneys to challenge anything and everything about the way an educational institution represents itself in hopes of finding something that can be adjudged a ‘substantial misrepresentation,’” Robertson wrote.
Colleges shouldn’t promise every student the moon and their dreams, of course. An entire student body can’t be above average. But if a student can argue that a university PR campaign “promised” a great career, that could open the door to a legal liability. That would be extraordinarily expense copy from the communications department.
“We won’t sit idly by while dodgy schools leave students with piles of debt and taxpayers holding the bag,” U.S. Secretary of Education John B. King Jr. said in a press release. “All students who are defrauded deserve an efficient, transparent, and fair path to the relief they are owed, and the schools should be held responsible for their actions.”
King isn’t wrong, but the strategy his department has used to protect students has given them a gangbusting method for exploitation.
The Department of Education has the power to protect students against shady colleges without creating those new rules. They control accreditation and have auditing powers to ensure institutions comply with standards. However, they’ve failed to make federal oversight effective, as an analysis found they rarely provide effective scrutiny.
Instead of reforming the auditing process, the department looks to create new rules. It’s an easier path, with less institutional resistance and more opportunities to create empty talking points. Lowering the bar for students to obtain loan forgiveness isn’t a long-term strategy that ensures the integrity of American colleges. It’s a short-term ploy to avoid responsibility for previous failure.
