Do For-Profit Colleges Need More Regulations?

Posted on March 16, 2016 at 12:00pm by
Will PSLF survive?

We recently discussed how the Federal Trade Commission (FTC) has filed a lawsuit against DeVry University over its potentially false post-graduate employment statistics. According to the lawsuit, DeVry was fudging numbers involving some of its graduates, including income made after graduation and whether they held jobs in their areas of study.

To respond to the growing number of complaints from graduates and former students involving for-profit colleges, the US Department of Education (also known as the Education Department) created the Student Aid Enforcement Unit.

How Will the Education Department Fight For-Profit School Fraud?

The new unit will be divided into four separate groups to help federal student loan borrowers.

The Investigations Group: The Investigations Group will identify for-profit colleges that are engaging in fraudulent business activities. Once identified, another group within the new unit will take administrative action against the schools, such as cutting off federal aid.

Administrative Actions and Appeals Service Group: The AAASG will serve as the teeth of the Student Aid Enforcement Unit by carrying out administrative actions against for-profit colleges that are conducting fraudulent business practices.

The Borrower Defense Group: The Student Aid Enforcement Unit will legally analyze cases for borrowers, assessing how and if they were affected by fraud. Borrowers with federal loans can reach out to the new unit and receive help for their specific cases.

The Clery Group: This group will ensure for-profit colleges receiving federal aid are in compliance with existing laws on disclosing crime statistics and security information to students.

These four groups will be tasked with carrying out existing and future regulations created by the Education Department to combat fraudulent for-profit colleges. Last week, we claimed more for-profit schools could be shut down in the near future. The Student Aid Enforcement Unit could play a significant role in shutting down fraudulent for-profit colleges.

Neil Sader and his team at the Sader Law Firm are Kansas City bankruptcy attorneys dedicated to helping student loan borrowers resolve their financial difficulties.