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Education Dept. Works to Nix Fraud at Colleges

by Halimah Abdullah /

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Following a series of high profile investigations of fraudulent practices at for-profit colleges, the Department of Education announced Monday that it will now devote a team to take a harder look.

The Federal Student Aid Enforcement Unit will work to root out fraud at institutions of higher learning.

“When Americans invest their time, money and effort to gain new skills, they have a right to expect they’ll actually get an education that leads to a better life for them and their families,” John B. King Jr., acting Secretary of Education said in a statement. “When that doesn’t happen we all pay the price. So let me be clear: schools looking to cheat students and taxpayers will be held accountable.”

The Department of Education already investigates colleges for fraudulent activity and has the ability to remove the school’s eligibility to receive financial aid. However, the new unit will position the department to move much more quickly, department officials said Monday.

As part of the 2017 budget, which the president will submit to Congress on Tuesday, President Obama is requesting $13.6 million in additional funds to strengthen the Department of Education’s Office of Federal Student Aid’s enforcement and oversight activities.

According to the Department of Education, in recent weeks officials have taken a series of enforcement actions against DeVry Education Group, Marinello Schools of Beauty, and Computer Systems Institute.

The Department of Education recently began action to end the participation in the federal student financial assistance programs of 23 Marinello Schools of Beauty campuses in Nevada and California and three Computer Systems Institute campuses in Illinois.

The department uncovered serious violations within both institutions.

The Education Department determined that Computer Systems Institute “submitted false job placement rates to its students, the Department, and its national accreditor, the Accrediting Council for Independent Colleges and Schools.

The Education Department also found that Marinello “was knowingly requesting federal aid for students based on invalid high school diplomas, under-awarding Title IV aid to students, charging students for excessive overtime, and engaging in other acts of misrepresentation.”

In November, the Obama administration reached a $95.5 million settlement with a Pittsburgh firm that runs for-profit trade schools and colleges.The Justice Department settlement resolves allegations that Education Management Corp. used enrollment incentives to pay its recruiters and exaggerated its career-placement ability

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