A team at the Department of Education that looked into abuses at for-profit colleges has been significantly dismantled, according to a report from the New York Times on Sunday.
According to the Times, who interviewed current and former employees of the department, members of the team, which was created in 2016, have been “marginalized, reassigned or instructed to focus on other matters.”
There are only three employees on the team now, who focus on student loan forgiveness and compliance cases. They are no longer investigating DeVry Education Group, Career Education Corporation, or Bridgepoint Education, which are prominent for-profit college companies. Under the Obama administration, the department was investigating for-profit colleges’ recruiting practices and job, according to the Times.
Many for-profit colleges have used deceptive marketing, messed with job placement rates to make students think they’d have a better shot after graduation than they actually do, and targeted low-income students, which resulted in students carrying debt they struggle to pay off with the incomes they have post-graduation.
In 2016, DeVry Education Group agreed to a $100 million settlement after a Federal Trade Commission lawsuit alleged that DeVry University misled students through deceptive advertising that told students that graduates of DeVry had 15 percent higher incomes after graduation than students at other universities and that 90 percent of graduates were employed in their chosen field within six months of graduation. Although the department also reached a settlement with DeVry earlier that year, there were other abuses team members planned to investigate.
The department put Career Education Corporation colleges on its heightened cash monitoring list in 2015. The list is for colleges that have their federal aid restricted due to financial and federal compliance issues. That year, for-profit colleges dominated the list. In 2016, the New Jersey Supreme Court ruled that people who attended Sanford-Brown Institutes and asserted “misrepresentations and deceptive business practices” could sue CEC, even though they signed a contract with an arbitration clause. For-profit colleges with dodgy practices often ask students to sign contracts with arbitration clauses.
Bridgepoint Education had to settle a lawsuit over enrollment tactics, was accused of firing a college official after he said the college was falsifying financial reports, and had a lawsuit brought against it by the California Attorney General for giving “false promises” and “faulty information” to students.
One of the most revealing details of the Times report was that team members needed “special approval” to communicate with people outside the department, such as attorneys general, after Trump came into office. Members also needed permission to ask for documents necessary for their work.
The department has hired a number of people who worked at for-profit colleges and their companies to work at the department, including a former DeVry University administrator. Last year, the department doubled the number of for-profit college representatives on its stakeholder panels for negotiated rulemaking sessions on the borrower defense to repayment rule, which was supposed to protect defrauded students who needed loan forgiveness. Many of the industry representatives present at the sessions have ties to colleges with shady records, Mark Halperin reported at the Huffington Post.
The department also didn’t waste any time unraveling many of the student protections the Obama administration moved to put in place. The department made proposals that would weaken the borrower defense to repayment rule and the gainful employment rule, which is designed to hold for-profit colleges accountable by asking them to meet a threshold for graduates’ debt-to-earnings rates. In January, Senate Democrats sent a letter to an advisory body at the Department of Education that identified a pattern of for-profits trying to convert to nonprofits to avoid investigations and accountability while continuing the same conduct.
The Times asked for comment from the Department of Education. Elizabeth Hill, a spokeswoman for the Education Department, said the group was reduced due to attrition and that these investigations are “but one way the investigations team contributes to the department’s broad effort to provide oversight.” Hill also told the Times that department employees with for-profit college industry pasts affected the team’s work.