Student Defense Report Shows Department of Education Continues Giving Troubled For-Profit Colleges Access to Federal Student Aid Funds
FOR IMMEDIATE RELEASE:
November 21, 2022
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Student Defense Report Shows Department of Education Continues Giving Troubled For-Profit Colleges Access to Federal Student Aid Funds
The U.S. Department of Education continues to approve access to federal student aid funds for for-profit colleges it knows to be defrauding students, a new report released today by Student Defense shows. The analysis found that the Department continues to renew Program Participation Agreements (PPAs) with for-profit schools that have engaged in predatory behavior. PPAs are agreements between schools and the federal government that allow students to pay for college costs through federal student aid, including grants and federally subsidized student loans.
“While the Department repeatedly touts how it has reconstituted the Office of Federal Student Aid (FSA) Enforcement Unit, established in 2016 and gutted during the Trump Administration, that Office has failed to show tangible results,” the report says. “FSA has not announced a single termination, suspension or limitation enforcement action against an institution participating in Title IV Federal Student Aid Programs since the Biden Administration took office. [...] Worse yet, FSA has repeatedly awarded new contracts to troubled for-profit colleges or otherwise allowed schools to continue to receive Title IV student aid funds.”
Over the last three months, the Department has granted or renewed at least five new PPAs with for-profit colleges that have a history of law enforcement activity and consumer fraud issues. Among these schools are Gwinnett College, La’ James International College, Lincoln College of Technology, Pittsburgh Career Institute, and Southern Technical College. All these schools were part of the recent Sweet v. Cardona settlement, where the Department agreed to issue more than $6 billion in loan discharges to defrauded students who attended these and other schools.
“On the one hand, the Department is saying that some of these schools are defrauding students. At the same time, they are still allowing schools to reap millions in student aid dollars,” said Student Defense President Aaron Ament. “Although the Department has made great strides in providing relief for defrauded students, we need front-end protections and enforcement actions to protect students from fraudulent schools and worthless programs.”
A full copy of the report can be found on the Student Defense website.