This week, the U.S. Department of Education announced the creation of a new Enforcement Unit to target colleges and universities that engage in misconduct and deceptive practices. The new unit will be comprised of three components:
- An investigative team that will audit colleges and universities;
- A sanctions board that will punish colleges and universities who engage in misconduct (presumably by cutting off federal student aid, which often is key to funding these schools); and
- A team of attorneys to review requests by borrowers for student loan forgiveness based on unfair and deceptive practices by schools.
Some other key facts about this new unit:
- At least 50 employees will staff the new office.
- The Dept. of Education is requesting $13.6 million in additional funding from Congress to support the team.
- A former leader of the Federal Trade Commission (FTC), which has a great record of advocating for consumers, will be heading up the new office.
- While the unit will be looking closely at for-profit schools, its investigative and enforcement powers will not be limited to vocational and trade schools. “Regular” nonprofit colleges and universities can also be targeted.
This is encouraging news, and comes during a time when states are actively targeting deceptive for-profit schools, and student loan borrowers are fighting back. However, it’s too soon to say how effective this unit will be. I think this is, in part, a political response to a barrage of criticism that has been hurled at the Dept. of Education for making federal student aid (on which so many schools rely) so readily available with minimal oversight. At the same time, this new unit’s budget and staffing make me cautiously optimistic that this is not just a political stunt – this could actually provide real, meaningful assistance to student loan borrowers.
Time will tell.