Search Page

Three Georgia women and an Alabama man pleaded guilty to conspiring to defraud the US Department of Education’s Federal financial aid programs worth millions of dollars. According to the Justice Department, they admitted enrolling people who were not eligible to attend college and completing financial aid applications using fake students’ names; they also did fake students’ homework and exams and manipulated grade requirements to continue qualifying for Federal financial aid.

The US Attorney’s Office arrested a nurse practitioner on federal charges of wire fraud, financial aid fraud and aggravated identity theft. She used doctors’ pedigree information and forged signatures to certify disability diagnoses that got more than $10.5 million in loans discharged for at least 125 people. She defrauded the federal Department of Education's Total and Permanent Disability discharge program, which relieves the student loans of those who suffer from permanent physical or mental disabilities.

The director of the Training Domain, an educational institution in Fort Meyers designed to improve students ‘employability skills, has been charged with 10 counts of wire fraud and one count of Federal Student Assistance (FSA) fraud. From July 2017 to April 2019, she assisted students in applying for financial aid but instead of using the loan and grant proceeds to hold classes and for other educational expenses, the director kept the FSA fund and split them with students. She also created false and fraudulent high school diplomas.

Immediately after the President was elected, borrower advocates and lawmakers expressed concern about what would happen to the current regulations aimed at holding for-profit colleges accountable. On Tuesday, their concerns were validated. The Education Department announced that it would delay and renegotiate two of the previous administration’s signature regulations: the first aims to penalize programs whose graduates’ loan payments exceed a set percentage of their earnings, while the second simplifies the process for borrowers who say they have been defrauded by their colleges.

Today’s higher education legal landscape in the USA is characterised by a wave of issues, including inflated employment rates for recent graduates, inflated starting salaries, as is the case with law schools and business schools, and the employment formula linked to federal grants and loans recipients, as is the case with for-profits. This wave will bring more lawsuits.

The Obama administration is highlighting growing concern over soaring United States student debt by forming a new enforcement unit to crack down on illegal behaviour by higher education institutions. The Department of Education said that it would create the unit, having taken action recently against several colleges for profiting illegally from students with deceptive marketing and inappropriate federal loans.

The US government administration is creating a new office at the U.S. Department of Education dedicated to investigating and punishing illegal activity at colleges and providing debt relief to defrauded federal loan borrowers. Officials on Monday announced a new “enforcement unit” that will be charged with investigating misconduct at colleges, imposing administrative actions against colleges and resolving student loan debt relief claims linked to fraud. The administrative reshuffling will speed up and improve the quality of the department’s investigations of wrongdoing.

Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive. Most colleges can’t keep their doors open without an accreditor’s seal of approval, which is needed to get students access to federal loans and grants. But accreditors hardly ever kick out the worst-performing colleges and lack uniform standards for assessing graduation rates and loan defaults.