Betsy Devos’ Flawed Regulatory Rollback

President Donald Trump looks toward Education Secretary Betsy DeVos, as he speaks during a  discussion at Trump National Golf Club in Bedminster, New Jersey, August 11, 2017.

On June 22, the U.S. Department of Education announced it was seeking input on regulations that should be repealed, replaced, or modified. The initiative is part of President Donald Trump’s agenda to rollback “burdensome” regulations. Regulations under review include critical rules that enforce strong consumer protections and guarantee civil rights.

The Center for American Progress submitted comments calling on the Department of Education to maintain regulations that protect students and taxpayers above all else. Second, the comments asks that the department not eliminate important regulations based on a simplistic assessment of burden. While CAP supports smart regulatory systems, eliminating regulations for the sake of an arbitrary goal undermines the nation’s higher education system and potentially brings harm to students.

A summary of key regulations that should be maintained is included below. The full comment can be found here.

Protect students and taxpayers

Every year the Department of Education provides nearly $130 billion in grants and loans to help 13 million students each year attend more than 6,000 colleges. This massive investment of public money means the Department of Education has an obligation to protect students and taxpayers. If anything, current regulations intended to protect consumers should be strengthened, not eliminated. Therefore, the Center for American Progress believes that the following regulations must remain.

Gainful employment

The gainful employment rule is a crucial measure for holding career training programs accountable so they cannot receive substantial sums of taxpayer money without producing a meaningful return. This regulation has brought positive sweeping changes to the career training sector. In response, colleges have closed programs that left students worse off, changed scholarship programs, and made other improvements, such as altering program curriculum and credential levels to better align costs. If this regulation goes away, career training programs and schools could go back to ripping off students through low-quality programs and some will continue to engage in deliberate predatory marketing to low-income people and veterans.

The Department of Education is currently failing to uphold its legal obligations with respect to this rule, even as it plans to start a new regulatory process that requires it to negotiate in good faith. Simple dislike of the rule is not a sufficient rationale for not enforcing it and carrying out legally required activities. This rule has been negotiated twice and survived multiple court challenges. Bringing the gainful employment rule back to the table again will do little more than use up precious government resources that could be better spent on other matters. The Center for American Progress has provided the department with more detailed comments on the plan to renegotiate gainful employment which can be found here and the new plan for appeals here.

Program participation agreement, or incentive compensation

Incentive compensation regulations prohibit colleges from paying bonuses or other commissions to recruiters in exchange for getting students to enroll. A previous attempt by the Bush administration in 2002 to weaken this rule resulted in colleges pursuing student enrollment through unethical and damaging recruiting tactics. Colleges paid recruiters bonuses for each student they enrolled, even when the student was not qualified or whether or not the student was able to succeed. Colleges and their recruiters manipulated students by exploiting their insecurities in what was known as the “pain funnel.” Eliminating the rules that guard against such tactics will lead to a return of unjust practices for the sake of profit and at the expense of students.

Cash management

Cash management regulations protect students from being misled or forced into paying excessive fees to access their federal student aid dollars. These rules cracked down on abusive banking products and practices tied to accessing federal aid dollars, making sure that student money goes toward education and not to bank fees. Past agreements between universities and cash management vendors allowed companies to take advantage of students receiving student aid refunds by offering debit cards with high fees. Eliminating these rules would put students at the mercy of cash management companies looking to profit off federal aid dollars that should be going toward students’ education.

Do not eliminate important regulations based on a simplistic assessment of burden

Current approaches to regulatory reform use a simplistic assumption that all burden is inherently bad. While some burden can and should be avoided, simply making colleges meet certain requirements to access taxpayer money is by no means unreasonable. Eliminating all burden for the sheer sake of elimination is counterproductive. Efforts to reduce burden should take into consideration the purpose of a regulation and how it applies in all contexts. The following regulations are still necessary to maintain a quality higher education system.

Substantive change

As the gatekeepers to federal aid, accrediting agencies are often the only oversight body reviewing certain aspects of college quality. Substantive change regulations require accreditors to review significant changes at an institution, such as change of ownership or offering online programs for the first time. The point of this review is to ensure that the institution has the capacity to make such a change and that it maintains quality. In these scenarios, accreditors are the main oversight body conducting an in-depth review to ensure change preserves college quality for students.

Some institutions and accreditors have called for increasing flexibility in substantive change regulations to ease the burden on well-established institutions. But weakening substantive change regulations just to reduce burden on elite colleges would also give a free pass to risky colleges that do not serve students well. Colleges relying on taxpayer money should prove they are capable of maintaining quality when they make big changes that could potentially have a negative impact on students.

Civil rights regulations and guidance

As called for by the National Women’s Law Center and countless others, all Department of Education civil rights rules and regulations are important and necessary. These regulations prevent schools and colleges from discriminating on the basis of race, gender, religion, or ability among other protected categories. All students should be guaranteed equal access to educational opportunity.

Data and transparency regulations

As our colleagues from the Postsecondary Data Collaborative note in their comment, some regulations generate critical information—while protecting student privacy—on the performance of our higher education system that is necessary for both students and the public. These regulations also ensure that our higher education system is equitable for all students. Regulations on data and transparency are critical for student and policymaker decision making. The federal collection of high-quality institution and student-level data provides valuable information to students and families making college decisions and helps ensure equitable student outcomes. Any regulatory rollback must maintain current data collections and public dissemination of data to ensure students are well-served and taxpayer investment is well-spent.

Conclusion

Repealing or replacing regulations for the sake of itself runs the risk of eliminating critical rules designed to protect students and taxpayers. In its review, the Department of Education should maintain rules that enforce strong consumer protections and guarantee civil rights. While regulations may cause some burden, burden alone is not an adequate reason for wholesale elimination. Colleges should follow basic rules in exchange for student and taxpayer money. As the above examples show, an absence of strong regulations or failure to enforce them leads to real harm. Harm to students or taxpayers as a result of negligence on behalf of the department is a price that is simply too high to pay.

Antoinette Flores is a senior policy analyst on the postsecondary education team at the Center for American Progress.