Dear Secretary DeVos and Dr. Johnson:
We write to inquire about the U.S. Department of Education’s (“Department") plans to change monitoring and enforcement tactics for federal student aid programs.[i] Effective monitoring, enforcement, and risk management are critical to ensuring that approximately $140 billion in federal financial aid disbursed each year is well spent. Without proper oversight of colleges’ use of federal financial aid, the Department would jeopardize the future of more than 12 million students and families accessing higher education and preparing for the jobs and opportunities of tomorrow. Throughout the history of the federal student aid programs, bad actors have taken advantage of students, borrowers, and taxpayers, which have led to accountability and enforcement measures designed to protect students-several measures that are now being rolled back under this Administration. We urge you to continue aggressive enforcement to ensure colleges and universities using taxpayer dollars are complying with federal law and to ensure that serious college misconduct does not reemerge.
The Department’s Aug. 31, 2017 announcement on enforcement stated that the Office of Federal Student Aid (FSA) has “a stronger approach" to holding colleges accountable and has “established an integrated system of complementary oversight functions to ensure compliance by all participating parties… These efforts are bolstered by comprehensive communications and executive outreach to ensure parties and their leadership understand their responsibilities, the consequences of non-compliance, and appropriate remedies." New staff were also announced in the areas of risk management, compliance, enforcement, communications, customer experience, and executive-level outreach.
Many of us have previously written to express our concerns regarding the Department’s appointment of a former executive of a for-profit college chain that has been subject to multiple investigations to lead FSA’s enforcement work.[ii] Our accompanying questions about Dr. Julian Schmoke’s appointment have still not been fully answered. Now, with a new “integrated system of complementary oversight functions" in place, we have additional questions about what specifically the Department has changed or will change about its approach to oversight of institutions of higher education.
Our questions have taken on a new urgency as the Department has rolled back or refused to properly implement rules that were designed to protect students, borrowers, and taxpayers. Even more concerning, the Department’s own Office of Inspector General (OIG) disagreed with these actions, as detailed in its November 2017 Semiannual Report to Congress.[iii] For example, with respect to the Department delaying the disclosure requirements under the gainful employment rules, the OIG said: “granting what would effectively be an 18-month extension of regulatory requirement negatively impacts program integrity."[iv] The OIG went on to note, “oversight and monitoring of Title IV program participants [is] one of the Department’s most serious management challenges."
As an independent watchdog, the OIG’s assessment of weaknesses in the Department’s oversight work underscores a necessity for the Department to act in a thorough, aggressive, and impartial manner when investigating misconduct. Federal enforcement officials should not establish close relationships with the same institutions they are tasked with regulating, which have a financial incentive to hide any wrongdoing. It is for these reasons that we are concerned about the Department’s plan for additional “comprehensive communications and executive outreach" to institutions that are under review or investigation by the Department now or in the future.
The Department’s August announcement also suggested a more industry-friendly approach to enforcement. The federal government should never provide corporate executives with advance opportunities to shield themselves from accountability. Few things discourage improper or criminal behavior like the prospect of individual decision makers being held publically accountable for their wrongdoing. The Student Aid Enforcement Unit was created in February 2016 to investigate and bring actions against colleges that break federal law. We urge the Department to avoid steps that would reduce the deterrent effect of aggressive oversight.
We cannot stress enough that compliance with student aid eligibility standards-frequently a box-checking exercise-is distinct from rooting out unfair, deceptive, or abusive acts or practices. We request that the Department provide clarity on how the roles of compliance and enforcement will be delineated. We also urge, as FSA assembles its new strategy, that you address the recommendations included in the OIG’s FY 2018 Management Challenges report, which identified several areas FSA needs to address serious flaws in college oversight and accountability, including:[v]
In order to understand how your new plan for college oversight and enforcement will address these and other issues, we request responses to the following questions:
These questions will help us to ascertain what goals the Department hopes to achieve with its new oversight plan. We request that a response to our questions be provided no later than Jan. 3, 2018. Thank you for your attention to this important issue of college accountability for the use of taxpayer-funded federal financial aid.
