More For-Profits Denied Federal Student-Aid Monies


What follows is a news release from the Department of Education.

Given how long it took the Department of Education to crack down on abuses at for-profit institutions, one wonders how much of that oversight will be reversed or simply ignored by the Trump administration.

One would think that allowing a return to widespread abuses will serve only to remind voters of the suits against Trump University and that the Republican majorities in Congress may have enough other divisive issues and scandals to “own” that they will not wish to create even more targets for criticism and investigation.

But such reluctance, such political prudence, would depend on our political systems’ operating in a fairly conventional way, and if anything is almost absolutely certain, it is that expecting predictable behavior is a bad bet.

Moreover, very little has been done nationally, under a Democratic administration, to address charter-school abuses. Indeed, the DoE under Arne Duncan and John King has, very arguably, not just turned a blind eye to such abuses but has facilitated and even fostered them.

So, perhaps the best that we can hope for is the absolute worst to occur: that is, that the profiteering from education becomes so blatant and scandalous that it finally does become indefensible, ideologically as well as morally.


In any case, here is the news release on the for-profits that are, however briefly, being held to account:

The U.S. Department of Education announced today that participation in the federal student aid programs will end this month for Globe University (Globe) and Minnesota School of Business (MSB), two for-profit colleges under common ownership. This enforcement action is in keeping with the Department’s ongoing efforts to protect students, safeguard taxpayer dollars and increase accountability among postsecondary institutions.

The Program Compliance and Enforcement Units within Federal Student Aid determined that Globe and MSB are ineligible to participate in federal student aid programs because Globe and MSB have been judicially determined to have committed fraud involving Title IV program funds. Additionally, both institutions knowingly misrepresented the nature of their criminal justice programs and the transferability of credits earned to other institutions. These callous acts of misrepresentation left many students without the credentials necessary for their chosen careers and no options to continue their studies at other postsecondary institutions. Many graduates incurred thousands of dollars of debt but had limited options for successful job placement in their chosen fields.

“Globe and MSB preyed upon potential public servants – targeting those with a sincere desire to help their communities.” said U.S. Under Secretary of Education Ted Mitchell. “These institutions misrepresented their programs, potentially misleading students, and abused taxpayer funds, and so violated federal law, which is why we removed them from the federal student aid program. This is a sober reminder that not all institutions deliver on their advertised promises.”

In letters sent today, the Enforcement Unit notified Globe and MSB that each school’s application for recertification to participate in the Title IV federal aid programs has been denied. Effective Dec. 31, 2016, students at both schools will no longer be able to use federal aid such as Pell Grants or Direct Loans to pursue their studies.

Earlier this year, following a lawsuit filed by Minnesota Attorney General Lori Swanson in 2014, a Minnesota court issued an order finding that Globe and MSB engaged in consumer fraud and deceptive trade practices by misrepresenting the job opportunities available to their criminal justice graduates. The investigation by the Program Compliance and Enforcement Units included review of the material presented at trial, the judicial determination arising from that trial, and information collected through various Departmental oversight and monitoring processes.

Globe currently enrolls roughly 1,000 students at ten locations in Minnesota, Wisconsin, and South Dakota and received $28.4 million in federal student aid during the 2014-15 award year. MSB enrolls approximately 700 students at nine locations throughout Minnesota and received $25.5 million in federal student aid during the 2014-15 award year. Both schools have until Dec. 20, 2016, to submit evidence to dispute the Department’s findings. . . .

Over the last three fiscal years, the Department has denied recertification applications for more than 30 institutions, including Marinello Schools of BeautyComputer Systems Institute, and Medtech College.

globe-university minnesota-school-of-business


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