Sen. Elizabeth Warren (D-Mass.) on Sunday wrote a letter to the Department of Education (ED) demanding that the department goes beyond publishing an annual list of low-financial-value programs and exercises more oversight and accountability to higher education institutions.
“As I offer support for your effort to identify low financial value programs that saddle students with mountains of debt that they have little hope of repaying, I also write to bring to your attention several other areas where the department can and should strengthen accountability and oversight of institutions of higher education that too often leave students with insurmountable debts,” Warren wrote in the letter.
Warren put forth eight recommendations for ED, including ensuring that institutions that fall below standards are subject to provisional Program Participation Agreements (PPAs) and are closely supervised to meet benchmarks to improve. PPAs are terms and conditions that institutions must meet to participate in the Title IV program. And for institutions that fail to improve, their Title IV funding should be revoked, Warren wrote.
She also called for stronger enforcement on for-profit institutions, specifically related to the concern that some may manipulate their cohort default rate data by nudging borrowers into forbearance. Additionally, ED should review for-profit institutions that convert to nonprofit status to ensure “covert” for-profit colleges are not redirecting funds to benefit private parties. ED should also use its authority to hold for-profit college owners and executives accountable if their institution fails or if those institutions “lie to students who take on massive student loan debts,” Warren wrote.
Other recommendations include improving oversight of online program management (OPM) companies and their arrangements with institutions. ED should conduct more oversight on accreditors and terminate accreditors if necessary to “protect students and taxpayers." Additionally, Warren suggested that ED should partner with the Consumer Financial Protection Bureau (CFPB) and other agencies to conduct fair lending risk assessments in order to ensure student lending practices comply with fair lending and civil rights laws.
She also called for ED to reinstitute and strengthen gainful employment rules, noting that she is concerned with the delays in implementation after the second negotiated rulemaking committee was unable to reach a consensus on proposed regulations. The release of the gainful employment rule proposal is set to come out spring 2023.
“I am encouraged by the department’s attention to the need for stronger accountability among institutions of higher education and the steps that the department already has taken to hold higher institutions accountable for their actions,” Warren wrote. “However, I believe more must be done. The department should take every opportunity to utilize the authority Congress has given it to ensure that schools are more accountable to students and taxpayers.”
Publication Date: 3/29/2023