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