Tag: Betsy Devos

DeVos ‘Not Going to Be Issuing Decrees’ on Civil Rights Protections

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U.S. Education Secretary Betsy DeVos clashed with Democratic lawmakers on Tuesday over protections for LGBT students, balking when asked directly if she would ban private schools from receiving federal funds if they discriminate against these students.

The Trump administration wants to invest millions into an unprecedented expansion of private-school vouchers and public-private charter schools, prompting critics to worry that religious schools, for example, might expel LGBT students or, more broadly, that private schools might refuse to admit students with disabilities. Testifying before a Senate Appropriations subcommittee, DeVos told Sen. Patty Murray, D-Wash., “Let me be clear: Schools that receive federal funds must follow federal law. Period.”

But after another Democrat, Sen. Jeff Merkley of Oregon, pointed out that federal law is “somewhat foggy” surrounding LGBT student protections, DeVos simply repeated that schools must follow federal law, adding, “Discrimination in any form is wrong.”

Merkley pressed again, asking DeVos point-blank whether private and charter schools receiving federal funds under Trump’s budget proposal could discriminate against students based on sexual orientation or religion.

She said the department “is not going to be issuing decrees” on civil rights protections.

Merkley asked Sen. Roy Blunt, R-Mo., who chairs the subcommittee, to note that DeVos refused to directly answer the question.

DeVos came under fire last month for a nearly identical exchange, refusing to tell a House Appropriations subcommittee whether she would block federal voucher funding to private schools that discriminate against LGBT students. U.S. Rep. Barbara Lee, D-Calif., told DeVos, “To take the federal government’s responsibility out of that is just appalling and sad.”

DeVos’ spokeswoman later said the controversy stemmed from a “fundamental misunderstanding” by lawmakers about what the secretary was talking about. On Tuesday, DeVos sought to clarify that she wasn’t talking about a specific voucher proposal. “It is really appropriations language,” she said.

During the nearly two-and-a-half-hour hearing, DeVos defended the Trump administration’s proposed $9 billion cut to education, saying the planned 13% reduction in funding may seem shocking, but it’s necessary.

“I’ve seen the headlines, and I understand those figures are alarming for many,” DeVos told lawmakers, according to her prepared testimony. The proposed 2018 budget, she said, refocuses the department on supporting states and school districts in their efforts to provide “high-quality education” to all students while simplifying college funding, among other efforts.

Overall, Trump plans to eliminate or phase out 22 programs that the administration says are “duplicative, ineffective, or are better supported through state, local, or private efforts.”

The administration wants to cut teacher training, vocational training and before- and after-school programs, among others. It also wants to eliminate subsidized loans and a new loan forgiveness program for students who commit to public service after college. Trump wants to funnel the savings into several school choice proposals — including a $250 million fund for expanding public funding of private-school vouchers.

The proposal faces an uphill battle in Congress. On Tuesday, Blunt, a Republican, called it “a difficult budget request to defend,” saying deep cuts to programs like after-school would be “all but impossible” to get through the committee.

Sen. Patrick Leahy, D-Vt., said Trump’s budget request “can be summed up in one word: abysmal.”

As she has recently, DeVos on Tuesday took a swat at past federal efforts to reform education, noting that discretionary spending at the U.S. Department of Education quadrupled between 1989 and 2016, from $17.1 billion to $68.3 billion.

The “seemingly endless” reform efforts, she said, have been top-down and have generated “more publicity than results,” failing to close long-standing achievement gaps between white, middle-class students and their low-income and minority peers. They’ve also produced disappointing results for high school graduation and college completion rates.

While achievement has been mixed in recent decades, high school graduation and college completion rates have actually risen, sometimes sharply. Federal data show that in 2015, the graduation rate for public high school students rose to a record-high 83%. U.S. colleges also awarded more degrees — 961,167, up 35.2% from a decade earlier.

A GOP mega-donor and four-time chair of the Michigan Republican Party, DeVos previously ran an organization that promotes private-school choice. DeVos last month called school choice critics “flat-earthers” and said expanding families’ educational choices is a way to bring U.S. education “out of the Stone Age and into the future.”

On Tuesday, she said more choice would help families in more ways than one, noting that when parents decide proactively which school their child should attend, “there’s a lot more engagement, naturally, as a result of that.”

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Betsy DeVos Would Not Agree to Bar Discrimination by Private Schools That Get Federal Money

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President Trump’s budget proposal includes deep cuts to education but funds a new push for school choice.

When pressed by representatives at a House appropriations subcommittee hearing on the budget, Education Secretary Betsy DeVos declined to say if, when or how the federal government would step in to make sure that private schools receiving public dollars would not discriminate against students.

She repeatedly said that decisions would be left to school districts and parents.

Rep. Mark Pocan (D-Wis.) stressed that Milwaukee’s school voucher program has resulted in years of failure. When he pressed DeVos on whether the federal government would hold recipients of public money accountable, DeVos punted.

“Wisconsin and all of the states in the country are putting their ESSA plans together,” said DeVos, referring to the Every Student Succeeds Act, a school accountability law. “They are going to decide what kind of flexibility … they’re allowed.”

“Will you have accountability standards?” Pocan asked.

“There are accountability standards,” DeVos said. “That is part of the ESSA legislation.”

That’s not true. ESSA’s regulations state that the law’s accountability rules do not apply to private schools.

Rep. Katherine Clark (D-Mass.) asked DeVos about a Christian school in Indiana that gets state dollars through a voucher program but explicitly states that gay students may be denied admission.  “If Indiana applies for funding, will you stand up and say that this school is open to all students?” Clark asked.

DeVos said states make the rules.

“That’s a no,” Clark said. Then she asked what if a school doesn’t accept black students.

“Our [civil rights] and Title IX protections are broadly protective, but when our parents make choices,” DeVos started.

“This isn’t about parents making choices,” Clark interrupted. “This is about the use of federal dollars.”

After a few more rounds like this, DeVos said that her “bottom line” is that “we believe that parents are best equipped to make decisions for their schooling.”

Clark said she was shocked by this response.

DeVos’ staff later came to her defense, saying that the line of questioning in the hearing concerned a “theoretical voucher program” and indicated a “misunderstanding” about the federal government’s role in education.

“When States design programs, and when schools implement them, it is incumbent on them to adhere to Federal law,” DeVos’ press secretary Liz Hill said in an email. “The Department of Education can and will intervene when Federal law is broken.”

[Los Angeles Times]

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DeVos Undoes Obama Student Loan Protections

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Education Secretary Betsy DeVos on Tuesday rolled back an Obama administration attempt to reform how student loan servicers collect debt.

Obama issued a pair (PDF) of memorandums (PDF) last year requiring that the government’s Federal Student Aid office, which services $1.1 trillion in government-owned student loans, do more to help borrowers manage, or even discharge, their debt. But in a memorandum (PDF) to the department’s student aid office, DeVos formally withdrew the Obama memos.

The previous administration’s approach, DeVos said, was inconsistent and full of shortcomings. She didn’t detail how the moves fell short, and her spokesmen, Jim Bradshaw and Matthew Frendewey, didn’t respond to requests for comment.

DeVos’s move comes a week after one of the student loan industry’s main lobbies asked for Congress’s help in delaying or substantially changing the Education Department’s loan servicing plans. In a pair of April 4 letters to leaders of the House and Senate appropriations committees, the National Council of Higher Education Resources said there were too many unanswered questions, including whether the Obama administration’s approach would be unnecessarily expensive.

A recent epidemic of student loan defaults and what authorities describe as systematic mistreatment of borrowers prompted the Obama administration, in its waning days, to force the FSA office to emphasize how debtors are treated, rather than maximize the amount of cash they can stump up to meet their obligations.

Obama’s team also sought to reduce the possibility that new contracts would be given to companies that mislead or otherwise harm debtors. The current round of contracts will terminate in 2019, and among three finalists for a new contract is Navient Corp. In January, state attorneys general in Illinois and Washington, along with the U.S. Consumer Financial Protection Bureau, or CFPB, sued Navient over allegations the company abused borrowers by taking shortcuts to boost its own bottom line. Navient has denied the allegations.

The withdrawal of the Obama administration guidelines could make Navient a more likely contender for that contract, government officials said. Navient shares moved higher after the government released DeVos’s decision around 11:30 a.m. New York time. Navient stock ended up almost 2 percent.

The Obama administration vision for how federal loans would be serviced almost certainly meant the feds would have to increase how much they pay loan contractors to collect monthly payments from borrowers and counsel them on repayment options. Already, the government annually spends around $800 million to collect on almost $1.1 trillion of debt. DeVos, however, made clear that her department would focus on curbing costs.

“We must create a student loan servicing environment that provides the highest quality customer service and increases accountability and transparency for all borrowers, while also limiting the cost to taxpayers,” DeVos said.

With her memo, DeVos has taken control of the complex and widely derided system in which the federal government collects monthly payments from tens of millions of Americans with government-owned student loans. The CFPB said in 2015 that the manner in which student loans are collected has been marred by “widespread failures.”

DeVos’s move “will certainly increase the likelihood of default,” said David Bergeron, a senior fellow at the Center for American Progress, a Washington think tank with close ties to Democrats. Bergeron worked under Democratic and Republican administrations over more than 30 years at the Education Department. He retired as the head of postsecondary education.

During Obama’s eight years in office, some 8.7 million Americans defaulted on their student loans, for a rate of one default roughly every 29 seconds.

Former Deputy Treasury Secretary Sarah Bloom Raskin worked on student loan policy during the latter years of the Obama administration, in part over concern that borrowers’ struggles were affecting the management of U.S. debt. DeVos’s decision to reverse some of her work “with no coherent explanation or substitute” effectively means that the Trump administration is placing the welfare of loan contractors above those of student debtors, she said.

In a statement Tuesday, Illinois Attorney General Lisa Madigan, who is suing Navient, agreed: “The Department of Education has decided it does not need to protect student loan borrowers.”

(h/t Bloomberg)

Betsy DeVos Hands Victory to Loan Firm Tied to Adviser Who Just Quit

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Americans who default on some of their federal student loans are likely to pay more after Education Secretary Betsy DeVos reversed an Obama administration directive limiting some fees. But it turns out the Trump administration decision has some beneficiaries—including the father of a key DeVos lieutenant who just quit.

DeVos’s decision, announced Thursday in a memorandum to the student loan industry, allows companies known as guaranty agencies to charge distressed student debtors fees equivalent to 16 percent of their total balance, even when borrowers agree within 60 days to make good on their bad debt.

The reversal is almost certain to hand United Student Aid Funds Inc., the nation’s largest guaranty agency, a victory in its two-year legal battle against her department. The fees could translate into an additional $15 million in annual revenue for the company, filings in a related lawsuit suggest. Until Jan. 1, United Student Aid Funds was led by Bill Hansen, who served as Deputy Secretary of Education under President George W. Bush. His son, Taylor Hansen, a former for-profit college lobbyist, was until three days ago one of the few DeVos advisers with professional experience in higher education.

The younger Hansen resigned from the Education Department on Friday, department spokesman Jim Bradshaw said in an e-mail. Hansen couldn’t be immediately reached for comment on his departure.

Ben Miller, senior director for postsecondary education at the Center for American Progress, a persistent critic of the new Republican administration, said on Twitter the rule change was “an early Father’s Day gift in the Hansen household.” U.S. Senator Elizabeth Warren, a Massachusetts Democrat, was equally blunt: “There’s no question” that Taylor Hansen’s family ties posed a conflict of interest.

Tens of millions of dollars in revenue was at stake for companies such as United Student Aid Funds, which until 2015 had regularly charged borrowers the fee. A senior executive there last year warned in a court filing that the Obama administration’s decision to prohibit the fees—and to remind the industry that such fees had long been banned—generated “potentially massive retroactive liability” for companies such as United Student Aid Funds in the form of federal fines and lawsuits from aggrieved debtors. The company reckons it levied as much as $119 million in these fees from 2007 to 2015, or about $15 million annually.

Meanwhile, other companies active in student loan matters faced the prospect of having to reverse years of assessed fees and unravel tens of thousands of borrowers’ accounts to recalculate their balances, according to a legal filing last year by the National Council of Higher Education Resources, a Washington trade association. Had the Obama administration’s decision stood, a federal judge warned in 2015 that the entire student loan industry faced the prospect of being sued for allegedly violating anti-racketeering laws by imposing the fees.

DeVos’s decision is likely to put those concerns to rest.

With almost all senior positions at the Education Department vacant—and few political hires with professional experience in higher education—the younger Hansen may have wielded significant influence on DeVos’s policies. With his departure, the department has yet another post to fill.

“We have no idea what Betsy DeVos thinks about or wants to do on higher education policy. If one of the key people advising her is someone whose close family member is hoping to charge defaulted borrowers a lot more money, that’s not a good sign of her agenda,” Miller said before the department announced Taylor Hansen’s exit.

Both the Education Department and Bill Hansen’s current organization, of which he is chief executive, Strada Education Network (formerly known as USA Funds), said there’s no impropriety. Taylor Hansen recused himself from “all matters” related to United Student Aid Funds’ lawsuit challenging the Obama administration directive, Bradshaw said. “He served ably and without conflict and decided his service had run its course,” Bradshaw said Monday, declining further comment. But it’s unclear whether Taylor Hansen’s recusal extended to internal department discussions over the appropriateness of the fees. Bradshaw didn’t answer additional questions, and Taylor Hansen didn’t respond to emails, phone calls, and a message sent on social network LinkedIn seeking comment.

Bob Murray, a spokesman for Bill Hansen, said no one representing the company had asked Taylor Hansen to intervene on its behalf in its dispute with the department. Furthermore, he said, United Student Aid Funds is now owned by Great Lakes Higher Education Corp. Murray said that Bill Hansen declined to comment.

United Student Aid Funds said in court filings that the Obama administration unfairly changed longstanding Education Department policy when it announced in 2015 that fees added to quickly resolved defaulted loans were illegal. For example, according to industry lobby National Council of Higher Education Resources, the department had never flagged the fee as inappropriate in any of the more than 135 audits or reviews it conducted of companies such as United Student Aid Funds since 1992. The feds, the group said, “knowingly acquiesced for years.” In the eyes of the industry, DeVos is simply righting a wrong by reversing Obama’s move.

Bill Hansen nonetheless benefits from DeVos’s decision. Strada is still liable for potential costs stemming from United Student Aid Funds’ lawsuit against the Education Department, as well as a related class action lawsuit filed by borrowers over the same issue, said Richard George, chief executive of Great Lakes.

United Student Aid Funds reached a proposed settlement in January to resolve the proposed class action, filed by Minnesota resident Bryana Bible in 2013 on behalf of borrowers charged what she alleged to be illegal fees. The deal calls for 35,516 borrowers, and their lawyers, to split $23 million to partially reimburse them for as much as $119.1 million in fees assessed over eight years that, under Obama administration guidelines, they shouldn’t have been charged. A federal judge is due to decide on the proposed settlement in June.

The now-permissible fees could also beneficially impact Strada’s future revenue under an agreement that calls for Great Lakes to give Strada grants partly based on how United Student Aid Funds’ loans perform, a person familiar with the matter said. When annualized, the fees represent about 13 percent of United Student Aid Funds’ average annual income over the past five years, according to its financial reports.

For struggling borrowers, said Rohit Chopra, a senior fellow at the Consumer Federation of America who previously advised Obama’s Education Department and was the top student loan official at the federal Consumer Financial Protection Bureau, “this just adds insult to injury.”

(h/t Bloomberg)

Betsy DeVos Press Release Celebrates Jim Crow Education System as Pioneer of “School Choice”

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Donald Trump met Monday at the White House with the leaders of a number of historically black colleges and universities. Secretary of Education Betsy DeVos commemorated the meeting with one of the more bonkers statements you will ever see a 21st century politician make, somehow twisting an attempt to bring up her pet issue of school choice into praise for the segregated higher education system of the Jim Crow South:

First of all, it sounds like a seventh-grader wrote this, which is perhaps what happens when you put someone who has never really had a real job in charge of the Department of Education. Second, this official 2017 federal government press release celebrates legal segregation (!!!) on the grounds that the Jim Crow education system gave black students “more options,” as if there was a robust competition between HBCUs and white universities for their patronage. (When black Mississippian James Meredith chose the “option” of enrolling at the University of Mississippi in 1962, a massive white mob formed on the campus; two people were shot to death and hundreds injured in the ensuing battle/riot, during which federal marshals came under heavy gunfire, requiring the ultimate intervention of 20,000 U.S. soldiers and thousands more National Guardsmen.)

DeVos is delivering the keynote address Tuesday at an HBCU event at the Library of Congress. Should be interesting.

(h/t Slate)

 

Pay to Play: Trump’s Cabinet is His Donors

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President Donald Trump’s transition efforts raised more than $6.5 million, according to government filings, with the vast majority of the donations coming after the election — including thousands of dollars from people linked to his future Cabinet.

According to filings with the General Services Administration obtained by CNN through the Freedom of Information Act, Trump’s transition fundraising vehicle, Trump for America Inc., raised $6,513,947.93 through February 14.

Donors included individuals, corporations and advocacy groups. Each entity is by law allowed to donate up to $5,000 maximum to transition efforts, which are financed in part by private fundraising and in part by federal funds.

Trump Cabinet nominees or their families were consistent donors.

His earliest supporter of the Cabinet was Linda McMahon, who is now confirmed as chief of the Small Business Administration. She gave the maximum donation on July 14, before Trump was even formally named the nominee by the Republican National Convention.

McMahon was nominated in December.

Wilbur Ross, expected to be confirmed as commerce secretary, maxed out on October 31. He was formally announced on November 30.

Other nominees waited until after the election.

The DeVos family gave 10 individual $5,000 donations on December 14. Betsy DeVos, now the secretary of education, was announced as the nominee on November 23.

Alan Mnuchin, the brother of Treasury Secretary Steven Mnuchin, gave $5,000 on December 9, though Steven Mnuchin did not donate. Exxon Mobil Corporation, the company that was helmed by Secretary of State Rex Tillerson before he was confirmed, gave $5,000 December 28 — though Tillerson himself did not donate to the transition.

Tillerson was named December 13 and Mnuchin was named November 30.

Former Labor nominee Andrew Puzder, a fast food executive, gave $5,000 on November 30. He withdrew from consideration this month after a series of controversial headlines and opposition from GOP senators. He was nominated on December 8.

There is no indication that Trump or his decision-making inner circle would have known about the donations.

Asked if DeVos had any concerns about the appropriateness of donating, her personal spokesman Greg McNeilly said “no concerns whatsoever.” The Department of Education did not immediately respond.

The White House did not immediately answer an inquiry as to whether Trump or his staff knew about the donations.

(h/t CNN)

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