FSA Announces Latest Institutional Oversight Tool: Secret Shoppers
By Hugh T. Ferguson, NASFAA Senior Staff Reporter
Federal Student Aid (FSA) on Tuesday announced that it will utilize secret shoppers to evaluate recruitment, enrollment, financial aid, and other postsecondary program practices, in order to ensure that schools are not conducting predatory or deceptive practices in violation of Title IV regulations.
The launch of this monitoring program is a part of the Department of Education’s (ED) Office of Enforcement, which is housed within FSA, and was re-launched during the Biden administration in an effort to strengthen oversight and enforcement actions against colleges and universities.
According to the announcement, findings collected by secret shoppers could serve as evidence to support an open investigation of an institution, or provide the basis for opening a review. Additionally, FSA said that the enforcement unit could share its findings with other law enforcement partners, including other federal and state agencies and officials.
“Secret shopping is another tool in FSA’s toolbox as we expand our oversight work to hold predatory schools accountable,” said Richard Cordray, the chief operating officer of FSA. “Our focus — as always — is to ensure that students, borrowers, families, and taxpayers are not being preyed upon to make a quick buck.”
FSA said that the scope of a secret shopper’s evaluation would touch on, but not be limited to, misrepresentations related to the transfer of credits into or out of a school; job placement, completion, and withdrawal rates; future earnings potential; career services offerings; cost of attendance; Title IV availability; and accreditation.
If FSA determines that an institution engaged in deception, substantial misrepresentation, or other predatory recruitment and enrollment practices the department will consider “all appropriate corrective actions and sanctions.”
As an example, FSA said that student loan borrowers who are subject to such practices could be entitled to a discharge of their student loans through borrower defense, and that institutions could be on the hook for those potential funds.
“Schools that engage in fraud or misconduct are on notice that we may be listening, and they should clean up accordingly,” said Kristen Donoghue, FSA’s chief enforcement officer. “But schools that treat current and prospective students fairly and act lawfully have nothing to fear from secret shopping.”
Publication Date: 3/15/2023
Ben R | 3/29/2023 2:55:14 PM
They are trying to close the front door by looking at admissions while leaving the back door wide open through IDR and loan forgiveness, when they should just be looking at borrowing and repayment rates. If too many of an institution's students borrow, they borrow much more than they can repay and too few actually pay down their loan principal, that's the time to step in and rein in the lending, case closed.
If over 70 percent of an institution's students borrow and fewer than 30 percent make any meaningful progress paying down their loans years after leaving, that's bad lending policy whether the admissions office overtly lies or not.
Lynn G | 3/28/2023 10:21:53 AM
Lots of good comments! I am not opposed to the 'secret police' since I don't have anything to fear from this action. However, it does concern me since this was done prior with unsubstantiated results that did have a negative impact. We certainly do not need any additional 'negative' feedback in the financial aid arena with higher ed, especially when there is so much going on - isnt' this always the case though (!).
Jennifer A | 3/16/2023 5:18:14 PM
I'd like to know how to apply to be one of these "secret shoppers". Honestly, it would be nice to go in and see first hand some of the actions I hear from students who attended for-profit colleges and felt they had been lied to or manipulated or suckered into paying more than they should have for degrees that don't land them a good job. Or to help students who have stranded credits at an institution because they didn't understand some portion of their student account vs their financial aid offer and thought it would cover everything when it didn't. I also think it might prove to be a useful tool to help institutions fill in gaps on their website to accurately give all vital information to the student in easy to access ways.
Henry Q | 3/16/2023 2:50:40 PM
This effort is absurd on its face. It seems to me that rooting out bad school actors is what audits and program reviews are for, not to mention the work done to meet accreditation standards. I concur with the commenters above who question timing of this effort.
Aesha E | 3/16/2023 11:45:31 AM
I have to agree with Andrew. Students *are* being misled by all kinds of universities and colleges, not always on purpose but it has the same effect. If things are being done correctly there's no harm in this; if there's a problem, it will be identified and addressed. This will only help students, and as a student who wasn't given information by her college when she needed it and struggled to make it to the finish line as a result, I'm hopeful about this initiative.
Peter G | 3/15/2023 11:29:57 AM
In principle I have no concerns with this, if one assumes it can be done well.
In practice I do share the concerns others have pointed to that this is one more initiative FSA is launching without seemingly having the resources and focus to successfully finish the many, many initiatives already in play.
Vincent F | 3/15/2023 10:59:30 AM
“But schools that treat current and prospective students fairly and act lawfully have nothing to fear from secret shopping.”
Wow. Where have we heard this before? "Secret Shopper" is Newspeak for "Secret Police." "If you are not breaking the law, you have nothing to fear from our spying on you!"
Andrew F | 3/15/2023 10:43:15 AM
I for one appreciate this. In my 16 years in higher ed, I have spoken with many students that were lied to or deceived at other institutions (granted, I don't hear about it as much anymore). If this prevents students from being deceived or helps an institution push through necessary changes, I am all for it.
Darren C | 3/15/2023 10:15:14 AM
We’ve seen these types of attempts by the gov’t and ED before to conceal an agenda. When ED states in an “effort to strengthen oversight and enforcement actions against colleges and universities.”, you can be clear there is another objective.
Let’s look back to 2010, when secret shoppers were previously used by the federal gov’t to assess questionable marketing practices at higher education institutions. On Nov. 30, 2010, the GAO Gov’t watchdog quietly revealed that its influential testimony on for-profit colleges was riddled with errors, with 16 of the 28 findings requiring revisions. All 16 of the errors run in the same direction -- casting for-profits in the worst possible light. The odds of all 16 pointing in the same direction by chance is 1 in 65,536.
Each of the GAO’s 16 corrections indicates that the recorded evidence was presented in an inaccurate or incomplete fashion, in every case portraying for-profits in a negative light.
Despite finally acknowledging the litany of errors that permeate the report, GAO spokespeople have asserted that “nothing changed with the overall message of the report, and nothing changed with any of our findings." Even in admitted error, the agenda marches on.
Jeff A | 3/15/2023 9:51:09 AM
They are putting considerable rresources to address fraud that barely exists.
Put this effort towards expanding transparency in outcomes, and higher ed will improve, and prospects will make better choices.
That will move the dial, not scary rhetoric, 'name and shame' lists, and solicitations to 'rat' on your college, which will score very few isolated small-scale 'gotchas' that will be trumpeted as huge victories for students.
James V | 3/15/2023 8:15:41 AM
Is now really the right time to be launching this? With everything else that is happening in the world of financial aid (from the Fresh Start Initiative to FAFSA Simplification - which by itself is entirely new to the community at large) FSA is now launching "secret shoppers"? I truly hope they provide institutions some grace in the coming years or we very well may see an even more prevalent increase in FAA departures (which will only feed the question of administrative capability).
James V | 3/15/2023 8:15:30 AM
Is now really the right time to be launching this? With everything else that is happening in the world of financial aid (from the Fresh Start Initiative to FAFSA Simplification - which by itself is entirely new to the community at large) FSA is now launching "secret shoppers"? I truly hope they provide institutions some grace in the coming years or we very well may see an even more prevalent increase in FAA departures (which will only feed the question of administrative capability).
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