How Schools Are Like Uber, Trump U Settlement, And Other Education News Of The Week

Apr 1, 2017
Originally published on April 1, 2017 4:40 am

Welcome to another weekly roundup from the NPR Ed Team, where we lasso the latest news on student aid, school choice, and more.

Trump University settlement finalized

Thousands of students are set to get money back now that U.S. District Judge Gonzalo Curiel has finalized the $25 million fraud settlement against Trump University.

The nonaccredited series of seminars, which shut down in 2010, was advertised as a way to share Donald Trump's expertise in real estate. Several lawsuits argued that the focus instead was on participants' wallets.

One playbook for staff members instructed them to target the financially vulnerable. "[f]or example: are they a single parent of three children that may need money for food?" Solution: encourage them to put the expensive course on a credit card or even multiple cards.

A holdout member of the class covered in the lawsuit, Sherri Simpson of Fort Lauderdale, Fla., sought to sue Trump individually. The judge dismissed her objection on Friday.

DeVos on choice: like taxis vs. Uber?

At the Brookings Institution, a centrist, Washington D.C.-based think tank, Education Secretary Betsy DeVos criticized her predecessor, Arne Duncan, for spending $7 billion on school turnaround programs with no discernible result.

She also compared charter and private schools to startups Uber and Lyft:

"Just as the traditional taxi system revolted against ridesharing, so too does the education establishment feel threatened by the rise of school choice."

Some on Twitter seized on the remark, pointing out that Uber has been in a whirlwind of scandal lately and that her analogy left out any public options, including the bus, train or bikeshare.

During a Q-and-A with Grover "Russ" Whitehurst, a Brookings senior fellow, DeVos raised eyebrows again. Asked whether school choice could inadvertently harm public schools, she responded, "I'm not sure how they could get a lot worse on a nationwide basis."

DeVos cited scores on the Nation's Report Card, or NAEP test, that she said were "stagnant" and on the international PISA test, which she said were "deteriorating."

She was swiftly fact-checked by Whitehurst. In most subjects, he pointed out, U.S. performance on PISA is on par with international averages, although we're worse in math. On the NAEP, scores have actually been rising.

Student aid data tool down for the count

In a surprise announcement Thursday, the IRS warned students who need help paying for college that they're on their own filling out the Free Application for Federal Student Aid, or FAFSA.

This year, because of several key changes made by the Obama administration, most students should have been able to use the IRS' Data-Retrieval Tool to quickly answer some of the financial aid form's toughest tax questions. Emphasis on "should have been."

Last month, the IRS suddenly announced it had suspended the tool "following concerns that information from the tool could potentially be misused by identity thieves."

Thursday, the IRS made clear there will be no simple fix, saying in a statement that "students and families should plan for the tool to be offline until the start of the next FAFSA season."

As in, October.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), said his group was "disappointed" by the news. He worried that, in referring to the tool as a "convenience," the IRS Commissioner had betrayed "a disheartening lack of understanding about how vital this tool has become in streamlining the financial aid application process."

Interestingly, in this week's statement, the IRS elaborated on its security concerns, suggesting that identity thieves may have already compromised the system to file fraudulent tax returns: "The IRS is working to identify the number of taxpayers affected by questionable use of the Data Retrieval Tool."

Until the DRT is back online, students will need to manually fill out their tax information, which can be a challenge for many English language learners and first-generation college students.

Trump administration defends accountability for for-profit colleges

In a rare instance of upholding an Obama-era rule, Trump administration lawyers defended "gainful employment" in federal court this week.

If too many former students struggle to pay back their student loans over time, the rule cuts the for-profit school off from federal student aid dollars.

The American Association of Cosmetology Schools opposes the requirement and sued. The group argues that some of their graduates' income comes from cash tips that go unreported to the IRS, making a fair comparison of debt to earnings impossible.

Debt collectors pass on big penalties

Secretary DeVos recently changed Education Department guidance to allow student loan collectors to immediately charge fees on students in default.

After an outcry from Democrats and consumer groups, Bloomberg reported, the debt collectors said they would keep the two-month grace period originally instituted in 2015.

Loan forgiveness? Not so fast

In other student loan news, back in 2007, the Department of Education created a program called Public Service Loan Forgiveness. Borrowers with certain federal loans were supposed to be eligible to have their loans forgiven after ten years of continuous employment at a nonprofit, or for the government or military, after meeting income qualifications.

Soon that first group of loans is due to be erased. More than half a million people have already applied; up to 25 percent of the workforce is theoretically eligible. And according to the New York Times, the department suggested in a legal filing last week that thousands of would-be participants may have their approval revoked at any time, meaning they'll have to pay those loans back after all.

Four borrowers, all attorneys, sued the department alongside the American Bar Association after they were retroactively denied eligibility.

For-profit alternative school investigation

Officials in Philadelphia, Houston and Columbus, Ga. are rethinking their relationship with Camelot Education, a for-profit provider of second-chance or alternative schools.

That's after an investigation in Slate by the Teacher Project at Columbia University School of Journalism and ProPublica found multiple allegations of physical abuse and assault by staff members against students.


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