Dept of Ed Student Aid Enforcement Unit to Reign In Abuses


The Department of Education introduced an enforcement unit earlier this week that will examine fraud, waste, and abuse within the higher education system.

During a news conference, acting Secretary of Education John B. King Jr. discussed the importance of the new unit, saying it will allow the department to act quickly and efficiently concerning illegal actions, reports Lauren Camera for USNews.

Over 50 staff members will initially make up the unit, including both current employees and several new hires.  Attorney Robert Kaye, who previously spent 14 years with the Federal Trade Commission, will run the unit and will report to Jim Runcie, chief operating officer of the Office of Federal Student Aid.

“It is simply imperative that students taking on sbstantial financial obligations to further their education not be subject to unlawful enrollment tactics, that they get accurate information … particularly about job placement,” Kaye said. “Our office is going to work every day as hard as we can to stop abuses and to promote the fairness and the integrity of the financial aid process.”

In all, the self-contained unit will be made up of four divisions working with the state and federal authorities in an effort to uncover misconduct.  The investigations division will hold the power to subpoena and will work with the department’s program compliance unit concerning reviews on an as-needed basis, reports Danielle Douglas-Gabriel for The Washington Post.

Two divisions already in existence within the department will be moved into the enforcement unit, including the Clery Group, which oversees campus security, in addition to the Administrative Actions and Appeals Service Group, which handles terminations, suspensions and resolves school disputes.

A separate group formed several months ago will also be folded into the new division, having been created to handle requests made from former Corinthian Colleges students looking to have their federal loans forgiven through a process referred to as borrower defense to repayment.  The process allows students to request to be forgiven of their federal loans if they can provide proof that the school used illegal or deceptive tactics to persuade students to borrow money to attend their schools.

The department received a massive amount of claims after Corinthian folded, which resulted in the creation of an independent monitor in charge of streamlining the process.  However, some argued that the new system is complicated and difficult to maneuver.  Since then, the department has hired 12 lawyers who will take a closer look at the state laws governing the 8,424 claims received so far.  To date, 1,312 claims have been approved, in addition to thousands of others from students who were affected by Corinthian’s closing.  The resolved cases amount to around $113.6 million in federal student loans.

Education Undersecretary Ted Mitchell said that while the department has been focusing on enforcement, the new unit will allow investigations and enforcement to be carried out at a faster rate, reports Halimah Abdullah for NBC News.

Recent weeks have seen the department pull federal financial aid funds from Marinello School of Beauty after receiving allegations that they falsified records, leading to the shut-down of the entire chain. Marinello has refused to admit that the allegations held any truth.

The department has threatened to cut DeVry University’s access to federal loans and grants if the school does not agree to stop airing advertisements concerning employment outcomes after graduation and to notify students that it cannot back up the claims the company has made.

Despite concerns expressed by Neal McCluskey, director of the Center for Educational Freedom at the Cato Institute, that the unit will focus too much on for-profit institutions, King responded by saying the unit is meant to cover the higher education sector as a whole.  He said, “We will follow the evidence on who is doing the wrong thing and move forward from there.”