Panic overwhelmed Kennya Cabrera Garcia when she realized that her diploma — the one she had taken out loans to earn — was virtually worthless. Without the job in medical office work the for-profit school had promised her, she had little to show for the experience but $200 a month in federal student loan payments.
“What do I do, what do I do, what do I do?” the East Boston resident remembered thinking as she worked three jobs to keep up with her bills.
Relief seemed to be on the way last year after she learned the Obama administration would forgive her Department of Education loans if she could prove she was defrauded by the for-profit college. But President Trump has brought the worries back.
Trump has thrust Cabrera Garcia and more than 65,000 other student borrowers across the country, including about 1,500 in New England, into a new state of financial limbo by suspending applications under Obama’s program of loan forgiveness.
Trump’s Department of Education has not said when it will restart the program. But it has signaled, as it rewrites the rules, that it will make it tougher to get relief in the future.
“While students should have protections from predatory practices, schools and taxpayers should also be treated fairly as well,” Education Secretary Betsy DeVos, an advocate for for-profit education, said in a speech last month.
“Under the previous rules,’’ she said, “all one had to do was raise his or her hands to be entitled to so-called free money.”
After years of pressure, the Obama administration in 2015 started waiving student debts accrued by tens of thousands of borrowers who say they were cheated by the for-profit colleges they attended and reimbursing past payments. Expunging loans was a tacit acknowledgment that the federal government bore some responsibility because it enabled, through its loans for tuition, widespread rip-offs by for-profit education companies.
Cabrera Garcia’s story reveals the ground-level disruption for individuals caught up in the Trump administration’s sharp shift in policy toward for-profit colleges. The move has compounded the negative fallout for reported fraud victims such as Cabrera Garcia, saddled with debt without the promised leg up in the workforce.
“I feel anxious right now,” she said. It feels, she added, like “we’re going backwards instead of going forward.”
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Cabrera Garcia emigrated from El Salvador in 2006 with her mother and siblings and dreams of better opportunities.
It was while filling out applications for jobs that Cabrera Garcia believes she checked a box agreeing to share her information with the Everest Institute, which was owned by Corinthian Colleges Inc., once one of the biggest for-profit school chains in the country. She began receiving weekly calls from the school. She started noticing the school’s commercials on TV.
“I thought, they were on TV, they were real,” said Cabrera Garcia.
When she visited Everest’s Chelsea campus, an enrollment official showed her a glossy brochure with a graphic suggesting an Everest education could eventually boost Cabrera Garcia’s income to nearly $40,000 a year — a fortune to a young woman making sandwiches for less than $10 an hour. The administrator promised the school would help Cabrera Garcia find a job.
And there was financial help: The Everest enrollment adviser explained how she could pay her tuition and expenses with student loans, which with fees and books amounted to $13,633, according to a financial aid worksheet Cabrera Garcia saved.
That sales pitch was conducted in Spanish. But no one was available to translate when Cabrera Garcia and her mother showed up to sign paperwork for their loans a few days later. They took out two federal student loans, one under her name, and one under her mother’s.
“We really didn’t understand what we were signing,” Cabrera Garcia said.
And no one said that her poor English meant she wasn’t ready for the classroom or that it would be an impediment to finding a job.
There were other trouble signs. Tests were open-book. She spent her “externship” at a Dorchester physical therapy office washing towels, cleaning, checking out patients — but not doing any of the billing work related to her studies.
The first day of class she was handed a prebundled package of her books —
The materials came in a hunter-green Everest-branded backpack. Looking over the receipt with a reporter last month, Cabrera Garcia realized for the first time she’d been charged $40 for the backpack, too. “I thought it was free,” she said.
A few days before graduation in March 2009, Cabrera Garcia was called into the school’s career office and told to sign a document saying the school didn’t have a responsibility to find her a job. She was taken aback, but the school official said she would not get her diploma unless she signed.
“I feel trapped,” Cabrera Garcia recalled. “What am I going to do? My mom is expecting me to have a degree, to have the paper in my hands.” She signed.
The document she did receive did not impress prospective employers.
“This is no good, we need someone with a certificate,” they told Cabrera Garcia as she made the rounds at career fairs, referring to a formal industry certification process for billing and coding jobs, which no one at Everest had mentioned to her.
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Cabrera Garcia first learned about the prospect of loan forgiveness through a TV news story about her former school closing. Currently enrolled students were entitled to get their money back. But Cabrera Garcia had graduated years earlier.
Months later, she received a letter from Massachusetts Attorney General Maura Healey’s office saying state records indicated that she had attended Everest and she could apply to have her loans forgiven if she had been a victim of fraud.
Cabrera Garcia sent back the reply card: Yes. Requests like hers poured into the US Department of Education starting in 2015 after years of state and federal investigations into the for-profit education industry. Those inquiries yielded widespread allegations of fraud and ultimately sparked the implosion of hundreds of for-profit schools across the country.
One of the biggest to collapse was Corinthian.
Obama’s Education Department, under heavy pressure from advocates including Massachusetts Senator Elizabeth Warren, acted under a once-obscure 1994 law and erased close to $600 million in federal loans from more than 31,700 borrowers, according to government data tracked by the Institute for College Access and Success, a California-based advocacy group. The vast majority of that relief was granted to former Corinthian students.
Then Trump took office, and the Education Department simply stopped reviewing claims. It suspended a key rule, scheduled to take effect July 1, that would have further cracked down on for-profit colleges and helped cheated students wipe out loans more quickly.
More than eight months into the new administration, it has not considered or ruled on any of the tens of thousands of unapproved claims the Obama administration left behind, some of which have been pending as long as two years.
Nor have Trump officials dealt with the more than 15,000 new claims that borrowers have filed since Inauguration Day, according to a letter the Education Department sent Congress in July.
The Education Department is “committed” to restarting review of loan forgiveness claims, spokeswoman Liz Hill said in response to written questions from the Globe. She did not directly answer the question of when, saying only that “progress is being made to develop a system to adjudicate pending claims” and casting blame on the Obama administration for letting “thousands upon thousands of claims” pile up.
Cabrera Garcia filed a claim for the federal government to wipe out her $3,400 loan, and refund her past payments, in May 2016. She is not required to make payments on that loan while she waits for a ruling.
Through Harvard Law School’s Project on Predatory Student Lending, the 32-year-old recently submitted an application to erase the roughly $9,000 debt her mother took on her behalf as well. Meanwhile she fell behind on her August payment on that loan.
“It would be a relief for me, for my mom,” Cabrera Garcia said. “I would say it would be justice, in some way, because they took advantage.”
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Advocates say they have numerous reasons to be skeptical about whether the administration is committed to delivering justice for student borrowers.
DeVos has investment ties to the for-profit education sector. She also has installed former executives and other officials from the for-profit education industry in her department.
Among them: Julian Schmoke Jr., as the Education Department’s top cop looking for schools that are cheating taxpayers and students of federal aid dollars. Schmoke is a former dean at DeVry University, a for-profit school that, along with its parent company, last year agreed to pay the Federal Trade Commission $100 million to settle allegations it lured students with false job and salary information. Critics also say he has little to no experience running investigations.
For-profit schools — which sued over both the loan forgiveness rule and another Obama measure targeting for-profit schools that DeVos also has since halted — say DeVos has taken appropriate actions to reconsider the Obama administration’s actions.
“These were ideological attacks on our sector, nothing more, nothing less,” said Steve Gunderson, president of Career Education Colleges and Universities, a lobbying association for the for-profit education industry. He said Obama education officials were determined to put for-profit schools out of business. “Had they dealt with us . . . in a fair and objective process in the beginning, we wouldn’t have to be doing a revisit.”
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Whether borrowers such as Cabrera Garcia — and students who feel they are cheated down the line — remain on the hook for their federal loans may be decided in federal court.
Healey and 18 other Democratic attorneys general have sued DeVos over the decision to delay the loan forgiveness rule.
“For the department to turn a blind eye and turn their backs on these students when there was a sensible plan and remedy already in place makes no sense,” said Healey, whose office began investigating shady for-profit schools in 2011.
Borrower advocates expect more lawsuits if the Education Department continues to stall.
After some hard post-Everest years, Cabrera Garcia picked herself up, took English classes, and got her GED, something else employers demanded but which no one at Everest had mentioned.
In 2015, she graduated from Bunker Hill Community College with an associate’s degree, and today she has a job with Blue Cross Blue Shield working with claims. Just after Labor Day, she started classes at Northeastern University, with plans to get her bachelor’s in health management.
It will mean big new loans. But at least she knows the degree will advance her career.