WASHINGTON — The Obama administration is taking new steps to protect students amid increased scrutiny of for-profit colleges and other schools.
The Education Department said Monday that it was creating a new student aid enforcement unit that will “respond more quickly and efficiently to allegations of illegal actions by higher education institutions.”
Critics have complained the government didn’t move swiftly enough to take action against for-profit schools like Corinthian Colleges, which filed for bankruptcy protection last year amid fraud allegations, closing schools and leaving thousands of students with hefty student debt and frustrated efforts at earning degrees.
“When Americans invest their time, money and effort to gain new skills, they have a right to expect they’ll actually get an education that leads to a better life for them and their families,” said Acting Secretary of Education John B. King Jr. “Schools looking to cheat students and taxpayers will be held accountable.”
The new unit, about 50 people to start, will investigate potential abuse and fraud and will be led by a former Federal Trade Commission enforcement attorney, Robert Kaye. It will pull staff from some existing department offices and add additional personnel. The realignment will use existing funding resources for now.
As part of his 2017 budget, President Barack Obama is requesting more than $13 million in additional federal money to strengthen enforcement and oversight of the billions of dollars in student financial grants and loans that the government provides.
“We have been doing enforcement,” said Under Secretary Ted Mitchell, at a news conference. “I think that it is right to say that we believe that we can do our investigations and our enforcement faster and better with the segregation of this work from the normal day-to-day program.”
Last week, for example, the department cut off federal loans and grants to a group of beauty and computer schools.
In the aftermath of the Corinthian collapse, the Education Department has been sorting through thousands of claims from Corinthian students seeking relief from their federal student loans, a bailout that could potentially cost up to $3.2 billion.
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