The Trump Administration Is Punishing Defrauded Students

Betsy DeVos has made it impossible for them to get full debt relief.

Four years ago, the for-profit Corinthian Colleges chain collapsed, leaving tens of thousands of students with onerous student loans and no degrees. Corinthian was one of the worst for-profit abusers, a fact that the Washington Monthly called out before almost anyone else.

The federal Higher Education Act has a provision meant to help such students. If you are defrauded by a college, then you can apply to the U.S. Department of Education to have your loans discharged. (It’s a safe bet that none of Corinthian’s marketing materials said “You are about to pay too much money for a low-quality program that does not lead to jobs as advertised, and also we are teetering on the edge of a bankruptcy that will leave you with credits no reputable college will accept.”)

Unfortunately, students who attended Corinthian and other exploitative imploding colleges experienced another kind of terrible luck: Donald Trump was elected president and named Betsy DeVos as his secretary of education. Ever since, DeVos has been trying her hardest to stop those loans from being discharged. This week, her efforts crossed the admittedly hazy line between heartless and absurd.

In what can only be staggering incompetence, wanton cruelty, or an especially Trumpian combination of the two, DeVos has made it mathematically impossible for defrauded students to get full debt relief. Ben Miller, vice president for postsecondary education at the Center for American Progress, explains in detail, but here’s the short version:

DeVos has decided that defrauded students only deserve full loan relief if they’re making much less money than the average program graduate. Even before we get to the nonsensical math, this is terrible as a matter of principle. It’s like saying that if someone breaks into your house, steals half your money, and gets caught, they shouldn’t have to give your money back, because you still have some money.

The approach is even worse in practice. In many cases, the average for-profit graduate doesn’t make much money to begin with—like, say, $20,000 a year. Because people who are defrauded by shady for-profit colleges still need things like food, shelter, and medicine. They tend to get jobs and earn money—but often, not much. That’s because their degrees are worthless, or non-existent.

At which point they run into this apparently obscure and difficult to comprehend concept called the minimum wage, and fall into the trap that Betsy DeVos has laid. If, after being defrauded, you work full-time at the minimum wage and earn the princely sum of $15,000 a year, DeVos says, “Look, that’s not that much less than $20,000, so NO FULL DEBT RELIEF FOR YOU.”

And it gets worse! In a powerful case for mandatory statistics education, DeVos and her crack team of advisers set the threshold for “much less than” as two standard deviations below the mean, which for some programs is … wait for it … a negative number.

As anyone who was not literally asleep or drunk during Stats 101 knows, not all distributions are normal. Some are distorted by factors like the minimum wage, or the fact that if people don’t make enough money for food, shelter, and medicine, they will die.

Earlier this week, the education committee in the House of Representatives brought DeVos to Capitol Hill to explain these policies. DeVos claimed that her formula is “scientifically proven,” because it involves statistics, which is not only wrong on its face–that’s not what “science” means—but further wrong as a matter of statistics, as Temple University professor Douglas Webber explains here. DeVos’s “scientific” approach includes an assertion that a difference in earnings is “statistically significant” if it’s two standards from the mean. Guess what? That’s wrong!

When Representative Lori Trahen called out DeVos on the minimum wage and negative number absurdities, DeVos simply, and falsely, denied it. Yet her staff then went back and rewrote the formula so that it does not technically produce a negative number but is otherwise, as a matter of mathematics, exactly the same. Ben Miller again explains. He had to fix one part of the Department of Education’s still-statistically-ridiculous formula, because it contained a basic arithmetic error.

But none of that matters, apparently, if your whole worldview is informed by an implacable hostility toward students who made the mistake of enrolling in a college that was fully approved by the federal government, and then had their hopes, dreams, and money stolen away.

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Kevin Carey

Kevin Carey directs the Education Policy Program at New America and is guest editor of the Washington Monthly College Guide issue.