For-profit colleges are winning their battle to dismantle Obama-era restrictions as Education Secretary Betsy DeVos rolls back regulations, grants reprieves to schools at risk of losing their federal funding and stocks her agency with industry insiders.

More than seven months into the Trump administration, DeVos has:


• Moved to gut two major Obama-era regulations reviled by the industry that would have cut off funding to low-performing programs and made it easier for defrauded students to wipe out their loans;

• Appointed a former for-profit college official, Julian Schmoke Jr., to lead the team charged with policing fraud in higher education — one of a slew of industry insiders installed in key positions. Schmoke is a former dean at DeVry University, whose parent company agreed last year to pay $100 million to resolve allegations the company misled students about their job and salary prospects;

• Stopped approving new student - fraud claims brought against for-profit schools. The Education Department has a backlog of more than 65,000 applications from students seeking to have their loans forgiven on the grounds they were defrauded, some of which date to the previous administration.

“The for-profit college industry appears to have gotten everything they lobbied for and more,” said Pauline Abernathy, executive vice president of the Institute for College Access and Success, which has long advocated for stronger consumer protections and tougher regulation of the schools.

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For-profit colleges, which enrolled nearly 2.5 million students in the p ast academic year, encompass multi state behemoths such as the University of Phoenix and DeVry, as well as hundreds of small trade schools that struggle to make ends meet. Since a Great Recession boom, the industry has been dogged by allegations of predatory sales techniques and poor outcomes that left tens of thousands of students drowning in debt while the schools raked in billions from federal student loans and grants. President Barack Obama sought to curb those abuses with a regulatory crackdown that the industry blamed for pushing two of its giants, Corinthian Colleges and ITT Tech, into bankruptcy, while others saw their stock prices nosedive and enrollment plummet.

For-profit college leaders, who hired Newt Gingrich , an ally of President Donald Trump , to help them navigate the executive branch, hail the friendlier approach as a welcome departure from the previous administration, which they and many GOP lawmakers say unfairly targeted their schools. But consumer advocates warn of loosening the reins on an industry rife with allegations that it lures students with false promises, saddles them with debt and then leaves them without the skills they need to get decent jobs.

Much of the fight is now shifting to the states, where Democratic attorneys general have been coordinating investigations of the industry and mounting challenges to DeVos' rollback of federal regulations.

“From Day One, Secretary DeVos and her advisers have chosen to side with predatory for-profit schools over the interests of students and taxpayers,” Massachusetts Attorney General Maura Healey said in an interview. “What they've done is actually make it easier for schools to cheat these students.”

Healey, a Democrat, led a group of 18 states and the District of Columbia in suing DeVos over her indefinite delay of Obama-era regulations meant to make it easier for students defrauded by their college to cancel their loans. Along with several other attorneys general, Healey is also seeking to intervene in a lawsuit to defend the Obama Education Department’s decision to terminate the federal recognition of the nation’s largest accreditor of for-profit colleges.

DeVos defends her decisions to unwind many Obama policies as an effort to preserve for-profit schools as an option for nontraditional students.

She “is committed to protecting students from bad actors while also ensuring they have multiple pathways to quality higher education,” her spokeswoman, Liz Hill, said in a statement to POLITICO. “It’s important that we continue to expand, not limit, paths to higher education for students. We can do that while also continuing to hold accountable those institutions that do not serve students well, no matter the institution’s tax status.”

DeVos is best known for promoting K-12 school choice, but while that agenda stalls in Congress, her highest-profile actions since taking office have involved for-profit colleges. She has moved to scrap regulations that would have cut off federal aid to career college programs where graduates are stuck with high loan debt but relatively low earnings. She also delayed a rule that would have barred the companies from requiring students to resolve complaints through arbitration, rather than a court or class-action lawsuit.

Beyond those changes, for-profit colleges are notching wins behind the scenes, as Education Department regulators scale back their enforcement of the industry and decide individual cases in ways that favor the industry.

The administration quietly killed a federal task force designed to crack down on abuses at for-profit colleges and share information across investigative agencies such as the Federal Trade Commission, the Consumer Financial Protection Bureau, the Securities and Exchange Commission and state attorneys general.

Steve Gunderson, the head of Career Education Colleges and Universities, the main lobbying association for the industry, said the Trump administration represents “a very positive change for us.

“I would say it has dramatically improved over what we had,” he said, adding that the Trump administration’s Education Department “is not engaged in an ideological war from the right, left or somewhere else” against the industry.

Gunderson said he’s had roughly a half - dozen meetings in person with Education Department officials over the past six months and many more conversations, though none yet with DeVos. By contrast, he said, his group met only once with a top department official during all of Obama’s second term. Gingrich has served as a consultant to the group, helping to make connections inside the Trump world, he said.

Trump Education Department officials have also shown leniency to the industry in reversing specific Obama administration actions against schools accused of wrongdoing.

The department sought to help the Charlotte School of Law, for instance, whose access to federal loans was cut off by the Obama administration over allegations that it misled students about the bar exam and failed to meet educational standards set by the American Bar Association. The school, which hired DeVos’ confirmation guide, or “sherpa,” as a lobbyist, won an initial offer to reinstate its federal funding from the Trump administration. The school and department officials were negotiating that deal when state regulators swooped in and forced the struggling school to close.

In another case, DeVos effectively reversed an Obama administration decision to deny federal aid to some campuses being sold by Globe University to another school owned by the same family. Last December, the Obama Education Department yanked federal aid to Globe, a Minnesota-based chain of for-profit colleges, after a state court said the company defrauded students and misrepresented its criminal justice programs. The change , first reported by Inside Higher Ed , was confirmed by documents obtained by POLITICO under a state public records request.

DeVos has also offered a reprieve to the hundreds of for-profit colleges scrambling to find a new accrediting agency since the Obama administration last year terminated the Accrediting Council for Independent Colleges and Schools, which it said approved too many dishonest schools.

The Obama administration told schools they needed to make progress in their quest for a stamp of approval from another accreditor by this fall or else lose their federal funding — but the Trump administration relaxed that requirement, pushing back the deadline until the end of this year, according to documents obtained by POLITICO.

Critics of the industry have also cried foul that Trump and DeVos have filled the administration with industry insiders.

A former for-profit college official, Anthony Campau, is counselor and chief of staff to the director of the Office of Management and Budget division that oversees agency rulemaking. Campau joined the Trump administration from Strayer Education, where he was associate general counsel until February, the company confirmed. Asked whether there are restrictions on his ability to work on regulations that affect the industry, an OMB spokesman said that Campau “is compliant with all ethics obligations.”

At the Education Department, Taylor Hansen, a former lobbyist for the industry’s main trade group, helped the Trump administration gain its footing as part of the “beachhead team,” but he has since left.

Last week, the administration tapped Schmoke, a campus administrator at West Georgia Technical College and former DeVry dean, to run the unit responsible for policing fraud in higher education. Congressional Democrats blasted the decision as a handout to the industry.

DeVos selected Robert Eitel, a former executive at Bridgepoint Education and Career Education Corporation, two large for-profit college operators, to be one of her senior advisers and co-chair the agency’s efforts to eliminate regulations.

Eitel has become a favorite target of Senate Democrats such as Elizabeth Warren, who said he may have violated federal conflict of interest law when he was simultaneously employed by both the Education Department and a for-profit education company in the beginning months of the Trump administration. Hill, the department spokeswoman, has dismissed the allegation as incorrect and “defamatory.”

In addition, Trump’s pick to be the Education Department’s general counsel, Carlos Muñiz, is a lawyer who worked at the firm McGuireWoods, where he provided “consulting services” to Career Education Corp . , according to his financial disclosure statement. The for-profit education company is under multiple state investigations.

Muñiz was also a top aide to Florida Attorney General Pam Bondi when she declined to bring legal action against Trump University, the now-defunct real estate seminar program run by the president. Emails obtained by T he Associated Press show that Muñiz was included in discussions of student complaints about Trump’s real estate seminars and helped defend Bondi to reporters on the issue.