In Early Moves, Education Department Erodes Some Student Protections

During the nearly four hours of questioning at her confirmation hearing in January, Betsy DeVos, the education secretary, did not speak with specificity about her views on a host of Obama-administration regulations meant to rein in abuses by for-profit colleges.

Ms. DeVos, who was known before her confirmation as a school-choice advocate, has virtually no background in federal higher-education policy. And many anticipated that, if confirmed, she would hire officials to fill in those gaps.

A pair of recent policy decisions begin to paint a picture of how that might play out.

In the early months of Ms. DeVos’s tenure, the Education Department appears to be placing a concerted focus on deconstructing Obama-era regulations held up as student-protection measures. And several members of the department, with clear ties to the industries they seek to regulate, have been in the mix on those efforts.

As of Wednesday, the department had not responded to several requests for comment for this article.

Earlier this month, the department delayed the effective date of the gainful-employment rule, an Obama-era directive meant to judge career-oriented programs based on the student debt of their graduates in relation to graduates’ earnings. And last week, it handed a victory to the student-loan industry by withdrawing a piece of guidance that limited some fees that could be levied on borrowers.

“It says a lot that their first steps are to rescind protections for students and borrowers,” said David A. Bergeron, a former assistant secretary for postsecondary education at the department. The emphasis of the last several administrations has been “trying to make the federal financial aid system more student-centered, student-focused, and student-protected,” and to see some of those protections rescinded is “very alarming,” said Mr. Bergeron, who now works at the Center for American Progress, a liberal think tank.

Robert Shireman, a former deputy under secretary in the department during the Obama administration, called the decision to withdraw the consumer-protection guidance “worrisome.” The federal loan program was created so that students and borrowers would not be left to the whims of collection agencies, said Mr. Shireman, who is now a senior fellow at the Century Foundation, adding that he was surprised by the decision.

“Is that a sign that the Trump administration will be siding with aggressive loan collectors and manipulative, predatory colleges? I don’t know,” he said. “I hope not, but it is a worrisome signal, and at least a sign, that they should be looking more closely at the purpose of these loan programs.”

In a letter to Congress, more than 50 consumer-protection, civil-rights, and college access and advocacy organizations expressed worry over the early moves by the department and the erosion of student protections. “We believe protections for students and taxpayers should be strengthened, not scaled back,” the letter said. A decision to delay, weaken, or repeal the gainful-employment ruling, the group said, “would lead to a new race to the bottom as unscrupulous schools compete to enroll as many students as possible without regard to the quality of the training, the student’s preparation, or the job prospects.”

‘Fox Guarding the Henhouse’

Sen. Elizabeth Warren, the Democrat from Massachusetts, has emerged as one of the more prominent voices criticizing the department’s early moves on higher education. Along with several other senators, Ms. Warren has sent a series a letters regarding the higher-education task force to be led by Jerry Falwell Jr., the decision to delay gainful-employment enforcement, and, most recently, the employment of Taylor Hansen, a former for-profit lobbyist, and Robert S. Eitel, an executive at a corporate owner of for-profit colleges. In the letter to Ms. DeVos last Friday, the senator asked why the two former for-profit-college employees, who were brought on by means shrouded in secrecy, were hired by the department in the first place.

Mr. Hansen, who resigned from the department last week, served as a lobbyist for the Association of Private Sector Colleges and Universities, now called the Career Education Colleges and Universities, for several years. The group has mounted a legal challenge to the gainful-employment rule, the start date of which the department recently delayed. He is also the son of William Hansen, who is the chief executive of Strada Education Network, previously known as USA Funds, a student-loan guarantee agency that sued the department in 2015 to remove the limit on borrower fees that the department just opted to strip.

As The New York Times reported, Mr. Eitel, an aide to Ms. DeVos, is on an unpaid leave of absence from Bridgepoint Education Inc., the for-profit owner of Ashford University. Bridgepoint has, in recent years, been the subject of numerous federal investigations regarding its use of federal student aid, its marketing practices, and the compensation of its staff.

But according to Mr. Bergeron, the leave of absence does not absolve Mr. Eitel from potential conflicts of interest. In fact, he says, it is likely in the best interests of Bridgepoint Education to allow Mr. Eitel to work in the Trump administration. “If you’re on a leave of absence from an organization, they’re expecting something back when you return to that organization,” he said. Taken together, Mr. Bergeron continued, it gives the impression that policies the department pursues are ones that are going to be favorable to Mr. Eitel’s employer, which runs afoul of the ethics guidelines set forth for federal employees.

“While on leave, [Mr. Eitel] has no work-related communications with Bridgepoint employees,” Marianne Perez, a spokesperson for Bridgepoint, said in an email. “He has no input on or interaction with Bridgepoint business matters,” she continued, adding that Mr. Eitel’s work email has been disabled. (Mr. Eitel didn’t respond to several messages seeking comment.)

Under federal ethics rules, employees are supposed to avoid even the appearance of conflicts of interest. But with the Bridgepoint executive, there is “a clear, apparent conflict of interest,” said Mr. Bergeron.

While members of previous administrations — most notably Sally Stroup, an assistant secretary at the department under President George W. Bush — have been criticized for their perceived conflicts of interest, the conflicts presented by Mr. Eitel are unique, as both he and Mr. Hansen were members of President Trump’s “beachhead” teams.

Unlike appointed members of a department, beachhead employees are temporary and do not have to weather Senate scrutiny. Accordingly, members of the Trump administration’s beachhead teams, such as Mr. Eitel and Mr. Hansen, exist in a sort of ethical gray area, where it’s unclear whether the rules apply, Ben Miller, a senior director at the Center for American Progress, told The Chronicle.

“It’s kind of like hiring someone like Arthur Andersen to set accounting standards in the government two months before Enron collapsing,” Mr. Miller said. “It is not normal to let an executive from a college under federal investigation to help make higher-ed policy. That is a massive and concerning conflict of interest.”

“You have the fox guarding the henhouse when it comes to protecting students now.”

Adam Harris is a breaking-news reporter. Follow him on Twitter @AdamHSays or email him at adam.harris@chronicle.com.