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Student Defense Releases Higher Education Curriculum for State Oversight

FOR IMMEDIATE RELEASE 
November 18, 2024

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Student Defense Releases Higher Education Curriculum for State Oversight 

Student Defense published a curriculum of higher education oversight activity today that State Attorneys General, State Authorizers, and non-profit impact litigation organizations can pursue to better protect student borrowers. 

“As Donald Trump prepares to take office with full Republican control of Congress, states will play a crucial role in oversight,” said Student Defense President Aaron Ament. “During Trump’s first term, we saw students stripped of meaningful protections while for-profit executives lined their pockets with profit. We look forward to working with State AG’s and State Authorizers to bring meaningful accountability during a second Trump administration.”

This curriculum provides a high-level overview of six areas where state actors can meaningfully impact oversight and accountability across higher education. Student Defense is ready and willing to assist any states looking at their legal authorities and strategies regarding the following topics:

  • Meaningful State Enforcement: The first Trump administration curbed meaningful enforcement of higher education institutions. If history repeats itself, state attorneys general will be crucial to ensure that predatory companies do not violate consumer laws in their recruitment of students and with respect to their tuition and financial policies. Beyond state attorneys general, state authorizing agencies play a key gatekeeping function to enable higher education institutions to access federal student aid funding, those entities can also play a key oversight role over institutions.  

  • Holding for-profit college owners and executives personally responsible for their schools’ predatory and reckless conduct: In 2020, Student Defense published a report (endorsed by Senator Elizabeth Warren (D-MA) and cited by six Senate Democrats in a subsequent oversight letter) on how the U.S. Department of Education could hold individual for-profit college owners personally liable for debts owed to the U.S. government. If the federal government refuses to hold individuals accountable, states play an important role in deterring bad conduct by holding individuals personally accountable for violations of state consumer laws. 

  • Addressing Racial Inequities and Reverse Redlining Practices: Student Defense recently announced the approval of a $28.5 million settlement in the class-action lawsuit against Walden University on behalf of Black and female students enrolled in the university’s Doctor of Business Administration program. An earlier ruling in that case marked the first known time that a federal court expressly allowed "reverse redlining" claims under the Equal Credit Opportunity Act (ECOA) to be considered on the merits in a higher education case. The CFPB recently endorsed this theory as well. Absent willing federal participants, state attorneys general are well-positioned to use civil rights laws to ensure that institutions are not illegally targeting members of protected classes.  

  • Reigning in OPM's and Enrollment Management Companies: At least two states presently have laws that prohibit institutions from making revenue share payments (or other forms of incentive-based compensation) to online program management companies and other providers. We encourage states without such laws to consider adopting them. In addition, in light of substantial allegations of consumer protection violations by the OPM industry, state attorneys general could consider opening a multistate investigation into the OPM industry. 

  • Effectuating Borrower Defense Discharges: The first Trump administration largely stopped ruling on borrower defense claims submitted to the Department of Education from, or on behalf of, students defrauded by an institution of higher education. Although substantial progress was made during the Biden Administration–spurred in part by private litigation–state attorneys general should monitor how the incoming administration treats these claims.

  • Monitoring the use of AI across the Higher Ed Lifecycle: As AI continues to impact the higher education landscape in new ways, it is clear there is potential for biases in data and algorithms to further inequalities in education. States can play a meaningful role in oversight of the use of AI across the student experience (from recruitment to financial aid packaging to instruction to student success).