In what may mark an early sign of more favorable treatment of for-profit colleges under the Trump Administration, the U.S. Department of Education has announced delays for colleges to submit appeals or public disclosures relating to gainful employment rules, Inside Higher Ed reported
Gainful employment rules -- created during the Obama Administration -- establish performance standards for for-profit colleges that tie their eligibility for federal student loan funds to their graduates' rate of success in loan repayments after entering the workforce. Republicans and Trump Administration officials have indicated that they will seek to curb or eliminate gainful employment rules.
In the recent announcement, the Department of Education granted roughly three-month delays to for-profit colleges to make filings relating to their gainful employment performance. According to Inside Higher Ed, the Trump Administration's Education Department said in a written statement that it decided to make the new delays to "allow the department to further review the gainful employment regulations and their implementation."
A federal district judge has denied an attempt by a controversial accrediting body to continue its work certifying for-profit colleges seeking to be eligible for federal student loans and grants.
United States District Judge Reggie Walton denied a motion filed by the Accrediting Council for Independent Colleges and Schools (ACICS) that would have blocked the U.S. Department of Education from taking steps to strip ACICS of its recognition as an accreditor for schools seeking the necessary eligibility for federal student loan funding.
In moving to strip ACICS of its accrediting authority in December 2016, then-Education Department Secretary John King wrote that the accreditor had "exhibited a profound lack of compliance" with its responsibilities. ACICS had been the accreditor for more than 200 institutions, almost all of which were for-profit colleges. Among others, ACICS had accredited Corinthian Colleges and ITT Tech, both of which came under federal scrutiny for alleged deceptive practices in enrollment and job placement statistics.
More than 4,500 students of the closed American Career Institute will be eligible for cancellation of federal student loan debt under a deal announced by Massachusetts Attorney General Maura Healey.
The for-profit ACI operated in Massachusetts and Maryland before suddenly closing in 2013.
Healey and U.S. Senator Elizabeth Warren (D-Mass.) worked with the U.S. Department of Education on the deal that will allow former students of ACI to have the balance of their loan debt wiped out and to receive refunds on debt payments already made.
The Boston Herald reported
that the deal came after the school was sued by Healey "over fraud allegations and admitted to misleading students."
Two for-profit colleges based in Minnesota are closing their campuses in several states after the U.S. Department of Education denied them further access to federal student aid funds.
The schools, Globe University and Minnesota School of Business, offered programs in Minnesota, South Dakota and Wisconsin. According to The Chronicle of Higher Education
, the two for-profit schools were denied federal student aid in December 2016 after the U.S. Department of Education "said they had committed fraud with Title IV funding and 'knowingly misrepresented' transfer eligibility for their criminal-justice programs."
Globe has indicated that students will be able to transfer to Broadview University, another for-profit school, for "teach out purposes." Minnesota School of Business students will be able to continue in classes through January 2016, and its students in a nursing program will reportedly be able to transfer to Concordia University of St. Paul.
For-profit giant DeVry University has agreed to settle claims asserted by the U.S. Department of Education relating to the school's marketing of its programs, which the government had alleged was deceptive.
“Students deserve accurate information about where to invest their time and money, and the law is simple and clear: recruitment claims must be backed up by hard data,” Education Secretary John B. King Jr. said in a statement announcing the agreement.
According to a report
in the Washington Post, "The Department of Education is subjecting DeVry University to tougher financial oversight as part of a settlement over the for-profit college chain’s alleged use of misleading information about the employment of its graduates in radio, television, online and print advertisements."
As part of its deal with the government, DeVry can no longer advertise that 90 percent of its graduates secure employment within six months of leaving school and must disclose on its website that this previous claim lacks substantiation.
A federal panel is recommending that one of the nation's leading accreditor of for-profit colleges lose its authority.
The recommendation that the Accrediting Council for Independent Colleges and Schools -- ACICS -- be stripped of its accrediting authority could prove disastrous for more than 200 colleges currently selling programs to more than 800,000 students nationwide.
Accreditation is one of the lynchpin's of any college's ability to function and authority to tap into federal student loan programs. For decades, hundreds of the nation's for-profit colleges have turned to ACICS to obtain their stamp of accreditation approval.
ACICS, in turn, has enjoyed the authority to grant accreditation through an approval process with the U.S. Department of Education. But a federal panel that helps determine which accrediting bodies can provide accreditation is now a recommending that ACICS be eliminated from the Department of Education's approved list.
in the Wall Street Journal, the National Advisory Committee on Institutional Quality and Integrity voted 10-3 last month to shut down ACICS's accrediting authority. The U.S. Department of Education now has until September 2016 to determine the accreditor's fate.
If ACICS loses its authority to accredit for-profit colleges, each college and trade school currently accredited by ACICS will have 18 months to find a new accreditor.
ACICS accredited Corinthian Colleges, a massive for-profit education company that collapsed in 2015 amidst state and federal scrutiny of the school's marketing and placement practices.
The Chronicle of Higher Education reports
that St. Catherine College in central Kentucky is closing after 85 years of operation, citing enrollment declines and the unavailability of federal student loan funds due to a dispute with the U.S. Department of Education.
According to the newspaper, "Administrators at the college said they had reached out to other institutions to establish teach-out plans for current students, and summer camps and classes will continue as scheduled, according to the statement. The college was expected to enroll a class of around 475 students in the fall semester. It employed 118 full-time faculty and staff members, as well as numerous part-time staff members and adjunct instructors."
The U.S. Department of Education is sorting through nearly 20,000 loan-forgiveness requests from students asserting that their for-profit colleges misled them when they took on heavy debt burdens to pay for expensive programs.
The Wall Street Journal recently reported that the Department of Education is processing 19,657 so-called "borrower's defense requests" in which former students have an opportunity to demonstrate that they were misled at the time of enrollment with promises relating to programs and job placement.
To date, the government has allowed around 3,400 borrowers to cancel $27 million in student loan debt, with the vast majority relating to former students of Corinthian Colleges, Inc., the for-profit giant that ran Everest, WyoTech and Heald College before it collapsed as a result of intense federal scrutiny.
The U.S. Department of Education plans to make it simpler for student borrowers who often are riddled by complicated procedures that often are favored by for-profit loan servicers.
On April 4, the Department announced
plans for a single web portal for borrowers to make repayment on their loans. The site will contain information about students' loans, payments and benefits in one place.
Consumer advocates have long criticized a federal student loan system that did not include sufficient oversight over the for-profit companies that service the loans and benefit from complexity and bureaucracy that has made it difficult for borrowers to pay and understand their debt.
The new portal will aim to have:
- Department of Education-branded communication that is standard.
- A streamlined borrower experience through a single web portal.
- Better customer service practices.
- Reduced loan transfers and borrower disruptions that make it difficult for borrowers to keep current.
- Enhanced oversight and accountability.
- A single platform for all Federal student loans.
The Education Department is in the planning stages on the new web portal and is inviting comment from borrowers, experts and others on the student loan repayment system.
The U.S. Department of Education has warned two businesses about the use of its government logos in its website marketing efforts aimed at adults seeking information about college programs and student aid, the Huffington Post reports
As of April 1, 2016, according to the Huff Post, one of the groups, Abuv Media, Inc., had responded by removing Department of Education logos and marks from its sites -- AffordableCollegesOnline.org and AccreditedSchoolsOnline.org -- and replaced them with a sentence stating, "This site is not affiliated with or endorsed by the U.S. Department of Education."
The discontinuation of use of Department of Education logos by the websites came after receipt of a March 24 letter from the government stating that use of the marks "inappropriately imply a relationship between the Department and these websites.
The second company to receive such a cease-and-desist letter from the government, according to Huffington Post, is MC Business Group, LLC, which operates Loansforgiveness.org.