Betsy DeVos’ vision for an indebted future? An AI student loan chatbot
AIDAN, Betsy DeVos’ proposed chatbot, signals that the Department of Education remains open for business.
It’s almost 2020, and Secretary of Education Betsy DeVos is still hellbent on keeping student borrowers in debt.
Earlier in December, DeVos gave the keynote presentation at the annual Federal Student Aid Training Conference in Reno, Nevada. Addressing financial aid professionals, she laid out her agenda for a future in which American students are “responsible consumers of education” and “free to learn” – but not with the right to a debt-free education.
The news cycle following the speech focused primarily on DeVos’ idea to separate the office of Federal Student Aid (FSA) from the Department of Education (ED), and the implications that would have for student debt cancellation.
However, FSA can't be separated from ED without cooperation from Congress, an unlikely possibility before 2021. On the other hand, DeVos currently has the power to effectively cancel student debt without approval from Congress – but chooses not to.
In their haste to report DeVos' unfeasible plan, the major stories neglected to analyse or even mention the most important and sinister aspects of the speech: this latest expression of DeVos' agenda to privatize all that is public on behalf of the ruling class, and the “NextGen” FSA initiative, a new technocratic approach to communicating with federal financial aid “customers” – i.e. students and their families.
The ruling class agenda for students: an indebted future
DeVos reminded the audience that during last year’s conference, she urged the attendees to “rethink student lending”. In that time, DeVos has been threatened with jail time and a top official of FSA has resigned, calling for student debt cancellation.
Even as she heads the agency overseeing it, DeVos candidly acknowledges the dire condition of the federal student loan program: principal isn’t being paid down in three out of four loans, 11 million borrowers are in delinquency or default, and 43% of loans are “in distress”.
However, rather than conclude that student debt ought to be cancelled, DeVos is pushing to modernize the financial aid process and run Federal Student Aid more like a “world-class financial firm”.
Why? To better “manage the student loan portfolio and work to secure its financial strength and sustainability” – in other words, to make sure student debt is never fully paid down and the financial interests of Wall Street investors speculating on student debt are protected.
Under DeVos’ leadership, updating the infrastructure that borrowers use may help simplify financial aid, but that alone will not alleviate the root causes of the student loan crisis – the underlying inequality of a capitalist system in crisis.
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The NextGen Initiative
The latest Next Gen developments planned for 2020 will introduce several new digital tools, including a financial aid chatbot powered by AI named “AIDAN”, a loan simulator, and a new “digital single-front door” to consolidate StudentLoans.gov, NSLDS, and FSAID into StudentAid.gov.
DeVos blames Congress for making the repayment process overly complicated, “no longer will students have to sift through countless websites; there will be one website. No longer will students have to dial wrong numbers, be transferred to different ones, and then sit on hold indefinitely; there will be one phone number”.
On the receiving end of communications from borrowers? The chatbot, personified by a green cartoon owl, will answer “routine questions” students may have about their loans. EdSurge reports a spokesperson from ED saying, “the Department of Education designed its chatbot to have personality traits and a conversational tone that mimic a live customer service representative”.
During her speech, DeVos demonstrates a text-based preview of the chatbot connecting a sample borrower with their servicer, the private corporation Nelnet (one of the major federal servicers which have together issued several hundred billion dollars worth of Student Loan ABS since market inception in 1992).
The financial aid professionals in the audience applauded the demonstration, but these tools may also have negative consequences for their futures. EdSurge reports that AIDAN is not the first chatbot in use for financial aid purposes. The article touts a press release from a small private university saying that their chatbot helps provide round-the-clock financial-aid services it could not afford to offer "if it had to staff its aid office 24/7 with human workers”.
Ocelot, an education technology company, markets itself as having emerged since 2017 as “the leading national provider of custom AI conversational chatbots, video content, and other self-service customer service tools to colleges”. Universities can brand their individual Ocelot bot, like a mascot for the financial aid department.
Ocelot boasts that their software can “resolve more than 96.5% of all interactions without needing a human”. It seems the Next Gen initiative will attempt to apply a similar model to the entire federal student aid system with AIDAN, but it is not clear if the chatbot will be text-based, if it will also use verbal communications, or if the chatbot will be the only way to contact FSA for financial aid assistance.
No matter how much AIDAN may increase efficiency, it will likely frustrate student borrowers and collect their data. Chatbots are harmful to customers and customer service staff, and their introduction to federal student aid will likely be no exception.
In the context of the upcoming 2020 elections, DeVos is signaling to wealthy donors and corporate entities that if Trump remains in power, the Department of Education will remain open for business. In her worldview, public education is a commodity to be bought, sold and capitalized on like any other, not a universal human right – and if you aren’t rich enough to buy political influence, that’s just too bad.
According to DeVos, “we live in some of the most exciting and opportunity-filled times ever”. At a time when the future of organized human life depends on reaching zero carbon emissions as quickly as possible, but fossil fuel extraction is still accelerating, this statement does not square with reality.
Even if the world wasn’t literally burning, how can DeVos expect students to be “responsible consumers of education”? Is it responsible that the government lends money to students for education, and allows Wall Street to speculate on the debt? Is it morally defensible to justify the existence of student debt when so many are suffering and will never pay it off, and when economists indicate that cancelling student debt would actually boost the economy?
It is not surprising that DeVos, the wealthiest member of Trump's cabinet, is out of touch with the lives of students and the 44 million student borrowers she is supposed to advocate for. Before her appointment to ED, she spent a career leading the “school choice” movement to privatize public education.
DeVos attended private K-12 schools and a private college. Her take on what has changed since FSA was created in 1965 is that students “don’t pay for higher education like they did” back then. “Today, they use different financial instruments in a different, constantly iterating economy”.
That constantly iterating economy is due for a recession, and while Betsy DeVos is in charge, her intention is to do an end run on collecting student loans – extracting as much capital from students as possible before the whole system collapses.
Automating financial aid with dystopian chatbots and streamlined websites will not solve the student debt crisis; the problem is the existence of student debt itself. Congress authorized $29 trillion worth of taxpayer money to bail out Wall Street a decade ago, but $1.6 trillion of student debt must be paid until the ice caps are melted?
At a time when US household debt is at an all time high, so is support for student debt cancellation. Mass debt cancellation has become a necessity, and the next president will have to contend with the movement of people demanding it, whether they support it or not.
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