A watchdog says the feds aren’t doing enough to investigate problem colleges

By: - January 22, 2023 1:00 am

As a result of misrepresentation by colleges, students may have trouble graduating, paying back their loans, or finding a job. Getty Images

WASHINGTON — Incomplete written guidelines and penalties that had not been updated since 2016.

Significant turnover and reductions among staff.

Changing agency priorities and department probes put “on hold.”

Over the past six years, these problems have stifled the U.S. Department of Education’s investigations team that is supposed to probe colleges that misrepresent themselves to the public, according to a recent report by a government watchdog, the U.S. Government Accountability Office. Much of the period studied was during the Trump administration.

As a result of misrepresentation by colleges, students may have trouble graduating, paying back their loans, or finding a job.

“When planning for college, students and parents should be able to trust that institutions are providing accurate information about their programs and their graduates’ success,” said Rep. Bobby Scott, a Virginia Democrat and ranking member of the House Committee on Education and the Workforce, in a statement.

“Unfortunately, as this report confirms, the previous administration chose to effectively ignore its responsibility to hold colleges accountable for misrepresenting themselves to students and the public.”

Colleges or universities that engage in substantial misrepresentation “make certain false or misleading statements — or omissions—about (their) programs, costs, or graduate employment, that students or others could rely on to their detriment,” according to the GAO report.

For example, if a college provides untrue information about the number of graduates that get jobs in their chosen field, the college is engaged in substantial misrepresentation.

How colleges are investigated 

Substantial misrepresentation by postsecondary schools is a violation of federal law.

The Department of Education established the Student Aid Enforcement Unit under the Office of Federal Student Aid in 2016 to enforce this regulation.

The unit’s Investigations Group has the authority to investigate and apply fines to colleges that substantially misrepresent themselves to the public, and deny their participation in federal student aid programs — a major blow for almost every institution of higher education.

However, the authors of the report found both the Investigations Group and its parent Student Aid Enforcement Unit had largely been sidelined in misrepresentation investigations over the past six years.

From fiscal years 2016 through 2021, largely under the Trump administration, the Department of Education imposed penalties against 13 universities for substantial misrepresentation.

Of the schools that were penalized, 10 were for-profit universities, two were private nonprofit schools, and one was a public research university. No schools that violated the law were publicly named in the GAO report.

Yet the Investigations Group only had direct involvement in two of the 13 misrepresentation probes noted, a number the authors attributed to “management priorities that had shifted away from investigations.” During this time, investigations were generally led by the School Eligibility and Oversight Service Group, a separate oversight branch also within the Office of Federal Student Aid.

The GAO team further found that all four active investigations being conducted by the Investigations Group were halted by senior management in 2017, the first year of the Trump administration.

From 2018 to 2020, the Investigations Group opened only one investigation into substantial misrepresentation by a college or university.

“Officials we spoke to were not able to explain the reason or provide documentation for the decision to place investigations on hold, but said their understanding was that management priorities had shifted away from conducting investigations,” the GAO report said. “Based on this decision, officials said that the Investigations Group stopped almost all of its investigations work.”

Staffing for the Investigations Group also shrunk significantly over the last six years, from nine staff members in 2017 down to two in 2019. The report found that the team has also had nine acting directors over the past six years, none solely dedicated to the Investigations Group.

The authors also found the Department of Education had not finished writing its own procedures for investigating colleges engaged in substantial misrepresentation, nor had it reviewed its penalty system for violators since 2016.

The department recommended updating these policies during an internal audit in 2019, and set several internal deadlines, but no action was ever taken.

Recent progress

The GAO acknowledged recent progress for the Department of Education in reprioritizing the Investigations Group and newly-organized Office of Enforcement.

The Investigations Unit has hired five new staff and started six new investigations into substantial misrepresentation since early 2021. Still, the GAO recommended that the Department of Education complete its written policies for investigation so it can better target high-risk colleges and apply appropriate penalties.

The Department of Education agreed with these recommendations, and said it will complete policies to help the Investigations Group select, assess and penalize schools that substantially misrepresent themselves to the public.

“We view that work as essential to a well-managed organization equipped to provide the most effective and efficient oversight to protect the investments made by students and taxpayers alike,” said Richard Cordray, chief operating officer of Federal Student Aid, in a written response to the report.

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Adam Goldstein
Adam Goldstein

Adam Goldstein is the D.C. Bureau intern for States Newsroom. Goldstein is a graduate student at the University of Missouri School of Journalism, studying digital reporting. He is originally from San Francisco, and loves swimming, cooking, and the San Francisco 49ers.

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