A few months ago we noted that 31% of college students in the U.S., or roughly 2.4 million kids, literally admitted to using student loan money to fund their binge drinking trips to Cancun and Daytona Beach for spring break.
Now, while most of us who’ve had the opportunity to live in the real world, outside the comfort of mom and dad’s basement, would consider it a bad idea to borrow 10-20 year debt to take a vacation we couldn’t afford, many college students seem to think it’s a perfectly acceptable practice.
Now, to be clear, we have no problem with making bad decisions, sometimes those are the most fun (see pic below for evidence). We only ask that the people who make the bad decisions are also the same people who get to deal with the consequences of those bad decisions.
Unfortunately, in the Obama administration the lines between victim and perpetrator were often blurred to be point of being interchangeable. So, while we may say that a college student who borrows money to binge drink is a moron (best case) or a criminal guilty of loan fraud (worst case), Obama would describe that same person as a victim of predatory student lending practices who had no idea that his/her 2.1 GPA in Anthropology from the University of Phoenix wouldn’t automatically guarantee him/her to a ‘career’ making $200,000 a year immediately upon completion of their 7-year Bachelor of Art degree….call it a po-tay-to, po-tah-to sort of conundrum.
Of course, faced with such a conundrum, the Obama administration did what any self-respecting liberal politician would do: it drafted new, confusing regulations to punish for-profit schools and basically made taxpayers backstop the ill-informed financial decisions of their students. The Washington Post described the resulting regulations as follows:
Under the borrower defense rules, students could have their loans erased if their college misrepresented the quality of its programs or broke a “contractual promise” with its students. The gainful employment rule was designed to ensure that graduates would be able to earn enough money to pay off their student loan debt.
The Obama administration had led a crackdown on for-profit colleges accused of misconduct. The Corinthian Colleges chain was under heavy pressure from the Education Department when it shut down in 2015. In that case, more than 15,000 student claims for loan discharge because of fraud have been approved, totaling $247 million in loans.
Last year, the ITT Technical Institute, one of the nation’s largest chains of for-profit colleges, shut down, saying it couldn’t survive sanctions by the department. The chain had been accused of misleading students about the success of its graduates and was at risk of losing its academic accreditation.
But, apparently the Trump administration isn’t susceptible to the same visual impairment when it comes to deciphering between ‘victims’ and adult-aged students capable of making logical financial decisions, should they so choose. So they’re tossing out the Obama rules and writing new ones…
The Education Department announced Wednesday that it will change two key Obama-era rules governing student loan forgiveness in cases involving fraud and misconduct by universities.
The department said it will convene special committees to rewrite Borrower Defense to Repayment and Gainful Employment regulations.
DeVos said in a statement Wednesday that the regulations were “overly burdensome and confusing” and need to be streamlined.
“The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs,” DeVos said.
She said many colleges have complained that the definition of misrepresentation and breach of contract is too broad and that institutions lacked meaningful due process. The Education Department will conduct hearings on the regulations in July.
“It is the department’s aim, and this administration’s commitment, to protect students from predatory practices while also providing clear, fair and balanced rules for colleges and universities to follow,” DeVos said.
…which has left some Attorneys General in snowflake states severely ‘triggered.’
Eight states and the District of Columbia filed a motion in federal court Tuesday seeking to retain the rules.
“The borrower defense regulations provide critical protections for borrowers who were subjected to misleading and predatory practices by their postsecondary institutions,” the motion says. It was filed in the case California Association of Private Postsecondary Schools v. Betsy DeVos.
Massachusetts Attorney General Maura Healey added that she plans to sue the Education Department “to defend these critical regulations and the rights of our students and taxpayers.”
“This is a betrayal of students and families across the country who are drowning in unaffordable debt,” Healey said in a statement.
Sorry snowflakes, you may have to repay for those Cancun trips all by yourselves…and, no, “I do not recall” the trip is not a valid excuse whether it’s true or not…that only works for Hillary and email scandals.
Written by Tyler Durden for Zero Hedge ~ June 15, 2017.
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