The Obama Administration just took a desperately needed step towards providing relief from crushing student debt to thousands of college students and graduates who were misled by universities into taking on federal loans. In addition to the soaring costs of education across the board, many colleges, and particularly for-profit “colleges”, have been taking advantage of students by misleading them about the nature of their courses, their odds of getting a job post-graduation, and the tuition and fees involved. This misinformation tricks students into taking on debt that they will never be able to repay but leaves them with a cereal-box diploma that does not offer them any real chance to succeed in the job market or any opportunity to advance their careers in exchange. As the class action lawsuits against Donald Trump and his elaborate Ponzi scheme masquerading as an education course, Trump “University,” goes to trial, the Obama administration has set out new guidelines that will forgive federal loans that students took out under false pretenses and to make sure that these avaricious crooks can’t take advantage of our young people again.
The new rules introduced today address two key points: First, colleges will be banned from using certain deceptive clauses in their contracts, and second, the burden of forgiven debt will fall on the colleges, not on the taxpayers. Analysts anticipate that by banning deceptive clauses in contracts, colleges will be less likely to attempt to defraud their students at all. However, if a college does mislead students into acquiring debt, the federal government will forgive the debt and the offending college will bear the financial burden. The rules also make it easier for students to sue colleges for cheating them.
This change in student loan policy marks a huge step in the right direction towards addressing how unaffordable education has become for anyone except the top 1%. To reduce inequality, enable socioeconomic mobility, and provide equal opportunities for success to all Americans, education needs to be accessible to all. The Obama administration’s policy does not fix the problem of overwhelming student debt – which is a much bigger issue than any one piece of legislation can deal with – but jilted students should be jubilant that the federal government is beginning to stand up for them in the face of manipulative for-profit colleges masquerading as scams like “Trump University” that deliver useless diplomas while extorting tens of thousands of dollars from their misguided students.
In order to continue making college affordable and accessible, we need to continue to elect leaders who prioritize the issue. Former Secretary Clinton has a detailed plan of how to make college affordable to a huge number of Americans, while Trump has nothing but empty boasts. Obama cannot fix everything between now and November with a notoriously uncooperative Congress – but he’s doing what he can in the meantime, and for that, we thank him. Higher education should be a right for all Americans – not just for those who can afford it, and we cannot allow it to become another arena for the ravenous jackals of hypercapitalism to feed off the American middle class.