California Attorney General Sues US Department of Education for Facilitating Oversight of For-Profit Colleges


ED Distance Education and Innovation Regulations Speed ​​Up Student Loans and Pell Grants to Schools with Little Oversight or Accountability

January 16, 2021 – SACRAMENTO – California Attorney General Xavier Becerra on Friday announced legal action against Acting Secretary of Education Mitchell Zais and the United States Department of Education (ED) on ED’s efforts to facilitate oversight and accountability of for-profit colleges at the expense of students and taxpayers. ED’s recently finalized regulations on distance education and innovation allow colleges to bypass requirements set out in the Higher Education Act to prevent federal Title IV funds, including federal student loans and Pell scholarships, to go to shoddy educational programs and for predatory purposes. for-profit establishments.

“One of the many shameful legacies of the Trump administration is the extreme efforts of its education department to accelerate public money to predatory for-profit colleges. Regulations that hold for-profit schools accountable were created to protect students, ” said Attorney General Becerra. “The new ED rules are hurting California students by diverting them from our excellent public college and university system and into education programs that are questionable at best, and outright scams at worst. ED’s last-minute attempt to dismantle for-profit school supervision regulations will not go unchallenged by California. “

Under the Higher Education Act, colleges and their educational programs must meet a range of eligibility requirements to participate in Title IV federal student aid programs, including certification by the secretary. Education that a college has the administrative capacity and financial responsibility to receive federal grants. funds. ED’s new “Distance Education and Innovation” rule illegally facilitates this review for the benefit of for-profit institutions. The new rule helps predatory institutions in at least two ways.

  • A school’s recertification request is automatically approved if it has been pending before the ED for 12 months. Automatic recertification in these circumstances directly benefits predatory institutions like Ashford University, which Attorney General Becerra sued in 2017 for defrauding students. Distressed schools often require exams longer than 12 months pending investigation by ED, an accrediting agency, or a state attorney general.
  • For-profit schools can now outsource 100% of the teaching of a program to another school. The new ED rule further leaves students unprotected by repealing an Obama-era 50% cap on the amount of instruction a for-profit school can outsource to a commonly owned school. This means that a student can now be forced to take all of their courses at a school in which they were not enrolled. It also allows predatory institutions to function as “portals” that direct students to shoddy online programs.

Today’s trial continues Attorney General Becerra’s work to serve and protect student borrowers. In November 2017, Attorney General Becerra for follow-up Ashford University and its parent company Bridgepoint Education for illegal marketing and collection activities, among other abuses; this lawsuit is pending in San Diego County Superior Court. In June 2018, Attorney General Becerra filed a complaint against Navient and its subsidiaries for illegally deceiving student loan borrowers, engaging in illegal collection practices and directing borrowers to more expensive repayment options. In December 2017, Attorney General Becerra filed a complaint against ED for its failure to provide loan relief promised to tens of thousands of students defrauded by Corinthian colleges. In March 2020, Attorney General Becerra filed a complaint against ED for its action to repeal protections for student loan borrowers under the paid employment rule. In June 2020, Attorney General Becerra filed a complaint against ED for failing to implement the Extended Civil Service Loan Waiver Program. And in July 2020, Attorney General Becerra complaint filed against Secretary DeVos and ED for repealing the 2016 borrower defense regulations and replacing them with regulations that would make it nearly impossible for defrauded students to obtain financial relief.

A copy of the trial is available here.
Source: CA. MJ

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