Watchdog Report Finds ED Lacking in Recent Efforts to Combat College Misrepresentation

By Hugh T. Ferguson, NASFAA Managing Editor

The Department of Education’s (ED) efforts to crack down on colleges making false or misleading statements about their programs have been stymied in recent years, with the Government Accountability Office (GAO) citing the agency’s reorganization, turnover, shifting priorities, and continued failure to complete written procedures for investigating colleges as primary issues for the lapse in enforcement.

The report dug into how ED organized its oversight activities and enforced penalties against institutions since the creation of the Student Aid Enforcement Unit in 2016 and the extent to which the department completed written procedures for colleges that engaged in substantial misrepresentation.

According to GAO’s findings, in 2017 ED placed open investigations “on hold at one point, and diverted the Investigation Group’s staff to other offices.” This led to fewer investigations being opened from 2018 through 2020.

In terms of staffing, the Investigations Group had nine different directors over a period of six years and the number of staff members dropped from nine to just two between 2017 and 2019.

GAO also found that ED imposed penalties, ranging from fines to ending the institution's participation in federal student aid programs, for substantial misrepresentation on 13 colleges from fiscal years 2016 through 2021.

“We strongly believe that holding institutions accountable for significant instances of substantial misrepresentation will help deter misconduct by other schools,” wrote  Richard Cordray, Federal Student Aid's (FSA) chief operating officer, noting that the administration had redoubled its efforts to rebuild the office. “This key office was first established in 2016 but was deprioritized in the prior administration. The Enforcement Office strengthens the Department's existing school oversight and compliance work by identifying and addressing serious wrongdoing. As we reconstitute that office, we are taking the time necessary to review and implement modernized procedures that govern our work.”

Congressional Democrats, in response to GAO, have argued that the report underscores the Biden administration’s commitment to keeping colleges accountable to students and the public.

“Combatting misrepresentation is critical not just for prospective students, but also for all taxpayers whose dollars go toward supporting colleges and universities,” said Rep. Bobby Scott (D-Va.), ranking member of the House Education and the Workforce Committee. “I am pleased that the Biden-Harris administration has taken meaningful steps to address this problem, and I urge the Department of Education to fully restore its capacity to investigate substantial misrepresentation by colleges.”

ED agreed to two recommendations from GAO, including completing written procedures for substantial misrepresentation investigations, including for selecting colleges and conducting investigations; and updating written procedures for imposing penalties, as appropriate, on colleges that engaged in substantial misrepresentation.


Publication Date: 1/18/2023

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