Education Department Unwinds Unit Investigating Fraud at For-Profits

"Members of a special team at the Education Department that had been investigating widespread abuses by for-profit colleges have been marginalized, reassigned or instructed to focus on other matters, according to current and former employees," The New York Times reports.

"The unwinding of the team has effectively killed investigations into possibly fraudulent activities at several large for-profit colleges where top hires of Betsy DeVos, the education secretary, had previously worked.

During the final months of the Obama administration, the team had expanded to include a dozen or so lawyers and investigators who were looking into advertising, recruitment practices and job placement claims at several institutions, including DeVry Education Group.

The investigation into DeVry ground to a halt early last year. Later, in the summer, Ms. DeVos named Julian Schmoke, a former dean at DeVry, as the team's new supervisor.

Now only three employees work on the team, and their mission has been scaled back to focus on processing student loan forgiveness applications and looking at smaller compliance cases, said the current and former employees, including former members of the team, who spoke on the condition of anonymity because they feared retaliation from the department.

In addition to DeVry, now known as Adtalem Global Education, investigations into Bridgepoint Education and Career Education Corporation, which also operate large for-profit colleges, went dark.

Former employees of those institutions now work for Ms. DeVos as well, including Robert S. Eitel, her senior counselor, and Diane Auer Jones, a senior adviser on postsecondary education. Last month, Congress confirmed the appointment of a lawyer who provided consulting services to Career Education, Carlos G. Muñiz, as the department's general counsel.

The investigative team had been created in 2016 after the collapse of the for-profit Corinthian Colleges, which set off a wave of complaints from students about predatory activities at for-profit schools. The institutions had been accused of widespread fraud that involved misrepresenting enrollment benefits, job placement rates and program offerings, which could leave students with huge debts and no degrees.

Elizabeth Hill, a spokeswoman for the Education Department, attributed the reduction of the group to attrition and said that 'conducting investigations is but one way the investigations team contributes to the department's broad effort to provide oversight.' She said that none of the new employees who had previously worked in the for-profit education industry had influenced the unit's work.

She also said the team's deployment on student loan forgiveness applications was an 'operational decision' that 'neither points to a curtailment of our school oversight efforts nor indicates a conscious effort to ignore 'large-scale' investigations.'"

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Publication Date: 5/14/2018

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