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Posts Tagged ‘student loans’

18 states are suing Betsy DeVos for putting for-profit college fraudsters over student borrowers

Friday, July 7th, 2017

Betsy DeVos is making it harder for students to get loan forgiveness after being cheated by for-profit colleges, but Democratic attorneys general across the country are challenging her in court. DeVos has had the Education Department put a hold on new rules that were supposed to take effect on July 1 protecting student borrowers—protecting student borrowers is definitely not what Betsy DeVos is about, let’s be clear on that—and 18 states are going to court to get the rules put back in place.

An existing federal law allows borrowers to apply for loan forgiveness if they attended a school that misled them or broke state consumer protection laws. Once rarely used, the system was overwhelmed by applicants after the wave of for-profit failures. Corinthian’s collapse alone led to more than 15,000 loan discharges, with a balance of $247 million.

Taxpayers get stuck with those losses. The rules that Ms. DeVos froze would have shifted some of that risk back to the industry by requiring schools at risk of closing to put up financial collateral. They would also ban mandatory arbitration agreements, which have prevented many aggrieved students from suing schools that they believe have defrauded them.

DeVos really is stepping in in favor of fraudulent schools over defrauded students—and taxpayers—in other words.

“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” said Maura Healey, the Massachusetts attorney general, who led the multistate coalition. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law.”

Two students left with debts after their school lied to them about their job prospects are also suing the Education Department over the same issues.

This blog was published at DailyKos on July 6, 2017.  Reprinted with permission. 

About the Author: Laura Clawson is labor editor at DailyKos.

Young Workers Struggle to Find Jobs, Pay Student Debt

Tuesday, May 8th, 2012
Credit: Joe Kekeris

Credit: Joe Kekeris

“For Most Graduates, a Grueling Job Hunt Awaits,” The Wall Street Journalwrites today. Over the weekend, The New York Times sounded the alarmabout employers’ growing use of unpaid internships in fields that typically have never exploited free labor.

So, how bad is it for young workers? According to the Economic Policy Institute (EPI), over the past year

“the unemployment rate for young high school graduates averaged 31.5 percent and the underemployment rate averaged 54.7 percent. For college graduates, the unemployment rate averaged 9.4 percent over the last year, while the underemployment rate averaged 19.1 percent. Unemployment rates for young African American and Hispanic high school and college graduates were higher than overall rates.”

Between 2000 and 2011, the real wages of young high school graduates declined by 11.1 percent, and the real wages of young college graduates declined by 5.4 percent. Entering the labor market during a downturn can have long-term scarring effects on young workers, in the form of reduced earnings, greater earnings instability and more spells of non-employment over the next 10 to 15 years, according to a recent EPI briefing paper, “The Class of 2012: Labor Market for Young Graduates Remains Grim.”

Compounding their economic grief, young workers face huge student debt loads, a burden that only will increase if Congress doesn’t act ASAP.

(If you’re in Washington, D.C., join young workers on Capitol Hill to meet with key offiicals and tell them what young people are saying about student loans, unemployment, access to higher ed and affordable health care. Click here to hop on a bus to the Hill and to find out more.)

Economist Heidi Shierholz, one of the report’s authors, says the solution to the crisis for young workers is the same as that for all the more than 14 million jobless Americans:

“The policies that will most effectively help young workers right now are ones that generate strong job growth overall, like fiscal relief to states, substantial additional investment in infrastructure and direct job creation programs in communities particularly affected by unemployment.”

This blog originally appeared in AFL-CIO on May 7, 2012. Reprinted with permission.

About the author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

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