In 2013, Morgan Marler decided she wanted a career in computers.
At the time, the now-29-year-old was living in Arlington and looking for a job that would pay well and give her a purpose.
She enrolled in ITT Technical Institute, one of the nation’s largest for-profit schools. It had been in business for 50 years and had eight campuses in Texas, a fact that reassured Marler. Counselors told her she could expect to make $60,000 with a degree in network system administration.
But almost a month after she graduated with honors, Marler received some shattering news: ITT Tech had been shut down by the U.S. Department of Education for questionable business practices. Because Marler already graduated, she didn’t qualify for the automatic loan relief given to students whose schools closed while they were still enrolled.
She had $30,000 in student loans, a young daughter and a degree that was virtually useless.
“It was probably four or five months into paying my loans that I realized I couldn’t get a job with that degree,” she said. “They lied to me about how much I’d make, they lied to me about how good their programs were, everything.”
Marler is one of nearly 14,000 Texans who were defrauded by for-profit universities and are waiting on the Education Department to grant them relief under the borrower defense rule, a federal policy that clears the debt of former students who were misled by deceitful schools. But the Education Department hasn’t granted a claim in over a year, legal experts say, and a new rule approved last week further tightens relief requirements, meaning more Texans could be waiting longer to see loan forgiveness — and many never will.
Since she applied for forgiveness two years ago, Marler hasn’t had to make a payment on her loans, but is still accruing interest. She now lives at Fort Hood, where her husband recently rejoined the Army. She would like to go back to school, but can’t afford to attend a legitimate university until the government clears her debt.
“For two years now, I’ve been waiting for an answer, and nothing,” Marler said.
‘Full stop’ on student requests
Texas has the third-highest rate of loan forgiveness requests in the country, after Florida (15,000) and California (35,000), according to the Education Department. In June, the Project on Predatory Student Lending at Harvard’s Legal Services Center filed a lawsuit on behalf of Marler and thousands of students in similar circumstances, claiming U.S. Education Secretary Betsy DeVos and the Department of Education are violating the law by ignoring students’ requests.
“Since January 20, 2017, the Department has claimed to be taking a short ‘pause’ to ‘re-evaluate’ the prior administration’s actions,” the lawsuit reads. “Behind closed doors, the Department’s ‘pause’ has been a full stop.”
Lawyers for the case are hopeful that the lawsuit will spur the federal government into action, but even as the case makes its way through the courts, the Education Department hasn’t stopped its efforts to roll back many protective policies instituted under the Obama administration.
On Aug. 30, DeVos announced a number of changes to the borrower defense rule, including time limits and more stringent evidence requirements. DeVos said the regulations — which will go into effect in July 2020 — are meant to protect borrowers and streamline the process, and would save the U.S. government $11 billion over 10 years.
“Too many institutions of higher education are falling short,” DeVos said in a statement. “The new regulations are aimed at preventing this behavior because students deserve better, and all institutions must do better.”
But Eileen Connor, legal director at Harvard’s Project on Predatory Student Lending, said the rules roll back protections for students and taxpayers, allowing for-profit universities to avoid oversight and take advantage of students.
“They’re just opening the floodgates for more abuse,” Connor said.
DeVos’ rule will put a three-year statute of limitations on borrower defense claims and require students to prove the university caused financial harm beyond the loans, among other things.
The rule also lets universities make arbitration a condition of enrollment, meaning that students would have to settle any legal disputes with the university out of court, keeping misconduct away from public eyes. Under the new rules, only about 3 cents of every dollar borrowed will be forgiven, according to the department’s own estimates.
Looking for guardrails
Under DeVos, the Education Department has taken a 180-degree turn from the predatory lending prevention policies of the Obama administration, Connor said.
“The Department of Education isn’t doing anything to make sure that there are guardrails in check on who is getting this money,” she said. “I think it has eroded people’s faith in higher education in general and the government in particular.”
There is some state oversight of for-profit institutions. The Texas Higher Education Coordinating Board requires all private colleges, both for-profit and nonprofit, to apply and obtain approval before offering classes in Texas. There are currently about 100 for-profit universities offering classes in Texas, according to a Coordinating Board spokeswoman. When a for-profit organization closes, the Coordinating Board works with the colleges to determine options for the displaced, degree-seeking students.
Furthermore, the state’s College Access Loan Program, which provides loans to Texas students who are unable to meet the cost of attendance, doesn’t disburse loans to for-profit universities.
There could be changes forthcoming, as Congress prepares to reauthorize the Higher Education Act, the federal law governing higher education. A spokeswoman for U.S. Sen. John Cornyn, R-Texas, said his office is aware of the problems with predatory loan relief, and expects it will be addressed during the act’s reauthorization.
In the meantime, Marler and thousands of Texas students will continue to wait. Until a solution is clear, their lives will be on hold, Marler said.
“I don’t tell people that I ever went to college, because I’m embarrassed that I got suckered into this school,” Marler said. “I graduated with honors, I did what I was supposed to do, but here I am, with no job and in way more debt than I’ve ever been in my life.”