AFT President Randi Weingarten on Department of Education’s Draft Borrower Rules

WASHINGTON—American Federation of Teachers President Randi Weingarten on the Department of Education’s new draft borrower regulations:

“For far too long, students and taxpayers have been ripped off by for-profit institutions. Students seeking a higher education and an opportunity to better their lives deserve fair protections from fraud and abuse, and those who have suffered at the hands of for-profit schemes deserve to be made whole. The AFT has fought for protections for students and taxpayers for years, long before Corinthian Colleges or Trump University made headlines for their immoral and likely illegal behavior.

“The AFT welcomes today’s draft borrower protection rule released by the Department of Education. We’re pleased the department is taking positive steps to help ripped-off students, and we look forward to a final rule that will do even more. Although the rule helps to curb the predatory behavior of for-profit institutions, the department also needs to ‘walk the walk’ by strengthening and enforcing its key provisions.

“The rule rightly bans mandatory arbitration, a dubious contractual provision pushed by many institutions that denies students their day in court and stops them from joining together with others when things go wrong. It ends gag clauses to prohibit students from speaking out about substandard instruction, among numerous other grievances. And it creates new financial protection triggers to ensure that institutions have adequate cash reserves to prevent the kind of sudden collapses we’ve seen at bad actors like Corinthian Colleges, which leave students and taxpayers footing the bill.

“But this rule could be stronger, and we call upon the department to make it so. As proposed, the rule does not start from the assumption that students who have been defrauded by their colleges are entitled to full relief, nor does it automatically capture actions against colleges by state attorneys general. Federal standards should be a floor, not a ceiling, for borrower defense claims.

“We want the department to take more aggressive action, including fully relieving all defrauded borrowers and providing relief to groups of borrowers without requiring individual applications from each student. The draft rule, which is permissive, allows more vigor but doesn’t require it—it permits the secretary, or a future secretary, to continue what is essentially business as usual. We need to get serious about making students whole, especially when the presumptive Republican presidential nominee is threatening to turn the department into a shell.

“If the rule itself won’t be more vigorous, we need to see the department fully honor the intent of the draft rule by taking the kind of strong policing actions necessary to give it real meaning. Only then will justice be realized for the hundreds of thousands of students defrauded, who are shackled with debt by providers that put their bottom line above their students’ futures.”