On Tuesday Betsy Devos, President-elect Donald Trump’s nominee for U.S. Secretary of Education faced intense scrutiny and questioning from Democrats on the U.S. Senate panel over her record and education experience.
While we do not have a clear view yet of the educational policies DeVos advocates for, the hearing did shed light on some of her personal positions and connections on the four following topics.
1. Student loan collections
Ahead of her confirmation hearing, some Democrats raised concerns about DeVos’s finances and business dealings.
Betsy DeVos is currently a billionaire philanthropist. She and her husband have extensive holdings in the RDV Corporation, a private investment and management firm.
According to The Washington Post, the firm is connected to a student loan debt collection agency contracted with the U.S. Department of Education. What’s more, 23 percent of the collection agency’s revenue is derived from its work with the Department of Education.
And if Betsy Devos is confirmed as Secretary of Education, she would have tremendous influence over who the Department of Education works with to collect defaulted loans.
Since collections agencies profit off of collecting past due loans, DeVos’s critics say that’s a conflict. In her role as Secretary of Education, Devos could adjust current rehabilitation plans and fees that could make it more difficult to get out of default.
Typically, nominees undergo an ethics review before a confirmation hearing. But in DeVos’s case, the review is still underway.
2. School choice = parent’s choice
DeVos is a long time advocate of school choice programs, particularly charter schools.
During her hearing, Devos affirmed that school choice would be a focus of hers as Secretary of Education
“Parents no longer believe that a one-size-fits-all model of learning fits the need of every child,” DeVos said.
Additionally, she noted that while she would work for the improvement of public schools, she would also fight for a parent’s right to send their child to a high-quality alternative if public education was not working for their family.
While sharply questioned by many Senate Democrats on the panel, she received support from former Secretary of Education and current Republican Senator Lamar Alexander (R-TN). Alexander said DeVos views are in line with the majority of Americans, while the Democrats’ stance on public education is outdated.
3. Regulating for-profit colleges
During the hearing, and under questioning from Democratic Senator Elizabeth Warren (D-MA), DeVos pledged to review a federal rule designed to monitor for-profit colleges.
It’s called the “gainful employment rule.” Established in 2014 by the Obama administration, the rule requires for-profit schools to demonstrate that graduates can earn enough income relative to their debt.
To meet the requirements, programs must show that the estimated annual loan payments do not exceed 20 percent of a student’s discretionary income or eight percent of their total earnings.
When questioned by Warren, DeVos said she would review the rule to ensure it is meeting its intended goal. Warren responded by saying the rule is in place and just needs to be enforced.
4. Student loan debt and college affordability
During the hearing, DeVos did not go into specifics on how she would handle the federal student loan system.
But when asked point-blank by Senator Bernie Sanders (I-VT) what she thinks about a free college initiative, she replied that it was an interesting idea, but nothing is really free. She also did not directly answer questions about issues affecting college affordability, such as childcare.
Warren also pressed DeVos on her past experiences with student loans and college financial aid, aiming to highlight DeVos’s lack of expertise in that area.
Although many Senate Democrats asked for more time to question DeVos on her potential policies, including those involving student loans, they were denied.
What’s next for Betsy Devos?
The confirmation hearing ended without voting to confirm DeVos. Over the next two days, the panel can submit written questions. The committee will not vote on her confirmation until she clears the ethics review.
If she completes the review satisfactorily, a simple majority vote will confirm her nomination as Secretary of Education.
For more information on President-elect Trump’s proposals for student loans, check out this article on his radical approach to federal aid.
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
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3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|