The US Department of Education is getting ready to allow millions of college kids the chance to blow off paying their debts — IF they can stipulate they were drawn to taking out a student loan and attending a certain school by “deceptive marketing.” (HOLY Saul Alinsky.)
This sideshow kicks off this fall:
A U.S. Education Department proposal set to become final this fall will offer billions of dollars in student-debt forgiveness for thousands of Americans who were drawn to schools by what they say was deceptive marketing.
The plan—the first of its kind to offer borrowers an outright escape from student debt—will impose some of the strictest new rules facing higher education in at least two decades. The rules as now envisioned would make it easier for people to sue colleges while forcing hundreds of colleges to set aside money to potentially reimburse students.
The Education Department estimates the plan could make taxpayers liable for as much as $43 billion in student debt over the next decade, though many experts say the tab could be far greater.[…]
More debt? Wheeeeeeeeeeeeeeeeeee !!!
What’s the deceptive marketing about? Oh, Junior taking out loans for $200K for an art history degree that earns him years of unemployment (or minimum wage employment) following graduation. MORE:
[…] A broad array of schools are lobbying the White House to scale back the rules, which they say would subject them to frivolous lawsuits and government sanctions even when they never intentionally deceived students. They also argue the plan would force them to turn away the most troubled students, reducing opportunities for poor people and minorities.
[…]The administration said the plan targets for-profit colleges, but officials said any type of school would be subject to sanctions if found to have committed abuses. Leaders across higher ed—including those at community colleges, public four-year schools and nonprofit schools—say they are worried the plan is so broad that benign practices, such as mentioning general benefits of getting a college degree, could be lumped in with outright deception.
“In theory a student could say, ‘I took English 101 and you didn’t teach me Shakespeare and the course description said you’d provide a solid foundation in Western literature,’ ” said David Baime of the American Association of Community Colleges.
[…]In a June note to clients, Credit Suisse analysts warned the proposal would inspire a “cottage industry of attorneys poring over advertising” by colleges, and could force the closure of many small schools.
The proposal also would require certain schools to boost their finances if circumstances suggested they were in financial trouble, and to disclose such issues to prospective students. Proposed triggers for the financial backstops include a federal investigation into fraud allegations, lawsuits by former students, accreditation actions, a sharp increase in students receiving Pell grants, and changing terms on a school’s own debt agreements.
These schools would need to set aside money—likely via a bank-issued letter of credit—equivalent to 10% of the federal grants and loans they received in the prior year. That could come out to hundreds of thousands of dollars for small, private liberal arts colleges, and tens of millions of dollars at major research universities. The money would be used to reimburse students if the school went under.
The plan would likely affect for-profit chain University of Phoenix, which faces multiple federal and state probes. But it also could hit the University of North Carolina, a well-established flagship state school, because the state institution faced an accreditation probation in 2015 amid allegations of academic fraud among athletes.[…]
Oh, yes. Remember the good ol’ African-American Studies scandal and good ol’ Dr. Nyangoro. Imagine even half of those students who took those courses sued the school for “deceptive marketing.” In the end, we the taxpayers foot the bill for UNC. This federal action could prove to be quite expensive for North Carolina taxpayers.