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For-Profit Schools, Fraud & Federal Funds


If you pay attention to the news you will see many articles of for-profit schools defrauding students. On numerous occasions the U.S. Department of Education has had to deal with these unfortunate situations. Because of this, an enforcement unit delegated by the U.S. Department of Education will be authorized to investigate the growing number of student aid fraud charges.

The unit will be divided into 4 sections. These sections include:

1. Investigations

2. Borrower Defense

3. Administrative Action

4. Compliance with the Clery Act

This will also include investigating the deceptive recruitment tactics believed to be used mostly by for-profit schools. Many students have spoken about the issues at hand and agree that it begins with the recruitment process. Students are told of many highly desirable benefits of going to school and unfortunately many are finding too late that these benefits aren't being upheld by the university.

Fraudulent Recruitment Tactics:

• Inflating job placement statistics

• Encouraging falsification of financial aid forms

• Lying about schools' accreditation

• Misleading duration or costs of programs

In the meantime, students hoping to mold themselves into better individuals are taking out private loans at high interest rates, so drastic measures are being taken. According to the Obama administration, "The Education Department cut off access to federal financial aid at 26 for-profit education programs in three states after complaints were made."

The numbers prove that this new unit is necessary. Already, "8,4224 claims have been filed by students, of those, 1,312 have been substantiated resulting in $85.6 million in paybacks," according to United Press International.

The intention of creating an enforcement unit is that problem areas will be resolved quicker and students will be able to live their lives as promised.


We at Timothy J. Sierra Attorney at Law would like to state that our blog posts and links, on our web page or any other social media outlet, to any other web pages are not intended for legal advice. We are not responsible for third party website information. If one is in need of legal advice please contact an attorney directly.

Source: UPI | Student Loans

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