After a hiatus for parental leave, I’m back and digging into who pays for schools’ alleged misconduct.
That figure is up about $174 million from last year, when Student Defense first released a report tracking funds owed by institutions to the Department based on government records. The reasons the Department assessed liabilities against the schools varied; some may have closed and so the agency had to discharge the money enrolled students borrowed to attend, others perhaps overdrew from the government’s coffers or applied loan money to an ineligible student.
Nicholas Kent, the chief policy officer for Career Education Colleges and Universities, an association representing for-profit colleges, said it was “inaccurate” that the Department isn’t moving to collect on liabilities owed to it. He noted that, for example, a school may be using a payment plan to repay the debt and therefore the institution’s progress on paying down the liability wouldn’t be reflected in the data.
“The best way to protect taxpayers is to not have institutions perpetuating these kinds of mass frauds that we’ve seen,” said Kyle Southern, the associate vice president at the Institute for College Access and Success, a research and advocacy organization. “That’s why the deterrent effect of these regulations and actually using the muscle and the tools at the Department’s disposal should create an environment where folks are on notice.
Richard Cordray, the chief operating officer of the Office of Federal Student Aid, told Scott in October that he thought his letter was “a good bit of a kick in the behind for us to make sure that we’re moving down the road on this.” Still, the report didn’t uncover any evidence that the Department is trying to get that money back. DeVry is still part of the federal student aid program, meaning the school continues to draw money from government coffers on behalf of students. That’s likely true of dozens of other schools where former students could or already have had their debt discharged.
Some of the colleges on the list have moved to intervene in the settlement, arguing that, among other things, the deal would harm the reputation of the schools on the list without giving them a chance to plead their case.
Source: Education Headlines (educationheadlines.net)
Private schools offering worthless majors, the market will regulate itself.
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