Ex-dean at for-profit college to protect you from for-profit colleges

The Department of Education has named a former for-profit university administrator with no obvious experience in law or consumer protection to lead a unit aimed at protecting students against unscrupulous schools.

Julian Schmoke Jr. most recently worked as executive director of campus operations at a public technical college in Carrollton, Georgia, according to his LinkedIn page. And before that he served as an associate program dean at for-profit college DeVry University. Late last year, the school agreed to pay $100 million to settle government charges that it had used unsubstantiated job placement statistics in its advertising to students.

The Obama administration established the Department of Education’s enforcement unit, within its Federal Student Aid unit, in late 2016 to “identify potential misconduct or high-risk activity among higher-education institutions and protect federal funding.” Its first chief, Robert Kaye, an attorney with roughly 15 years of experience in regulatory enforcement at both the Federal Trade Commission and the Department of Education, resigned earlier this year.

Schmoke’s appointment is seen by critics as latest indication that the Trump administration is adopting a friendlier approach to for-profit schools.

Under Trump and Education Secretary Betsy DeVos, the government has taken a range of actions that appear favorable to for-profit schools, including halting the processing of student loan forgiveness requests, hiring a number of former for-profit executives, and delaying the implementation of Obama-era regulations aimed at protecting students against unscrupulous schools.

“Dr. Schmoke will lead a team focused on identifying, investigating, and adjudicating statutory and regulatory violations of the federal student aid programs and on resolving borrower defense claims,” said an official statement announcing his position.

News of his appointment was greeted with criticism from Democrats in Congress.

“We need a strong, independent, and experienced higher-ed enforcement chief who is up to the task of protecting billions of dollars in taxpayer funds,” said Sen. Elizabeth Warren of Massachusetts. “Dr. Schmoke’s resume raises serious red flags.”

Total student debt was over $1.3 trillion in the first quarter of 2017, making it the second-largest category of consumer debt behind home mortgages. In recent years, for-profit colleges have been a key driver of the surge.

The schools disproportionately draw their students from poor communities and neighborhoods. Students at for-profit schools also are much less likely to graduate or complete four-year degrees. Some 30 percent of the students who left for-profit and community colleges in 2011 defaulted within three years, compared to 13 percent of undergraduates at private and public institutions.

Defenders of for-profits say the schools are more user-friendly, for example offering flexible schedules that allow people to work and attend classes. As a result, they open access to higher education to poorer Americans. They argue that it is unsurprising that these students would have less favorable economic outcomes.

But there have been numerous instances of abuses by for-profit schools in recent years, underscoring the need for close enforcement of an industry where some institutions have urged students to load up on debt in exchange for an educational experience of dubious quality.

Over the last two years, the U.S. government cut off two of the country’s largest for-profit college companies, Corinthian Colleges and ITT Technical Institute, from access to federal student loans amid allegations that the schools had misled students about job-placement rates for graduates.

Both companies subsequently closed, leaving thousands of students in the lurch. More recently, DeVry agreed to pay $100 million to settle a government lawsuit that it too had misled students. (DeVry has since changed its name to Adtalem Global Education.)

“The last thing students need is a former DeVry administrator protecting them from educational scams and bad actors,” said Sen. Sherrod Brown of Ohio in response to the news of Schmoke’s appointment. “Students deserve an experienced, qualified investigator looking out for their best interests.”