Elizabeth Warren: Executives Of Predatory Colleges Should Be Held Personally Liable For Misconduct
Adam S. Minsky, Esq. Senior Contributor
October 5, 2020
Senator Elizabeth Warren called on Monday for the owners and executives of predatory schools and colleges to be held personally liable for school misconduct.
“Millions of Americans are being crushed by over $1.5 trillion dollars in outstanding federal student loan debt, with Black and Brown communities disproportionally impacted, especially as the COVID-19 pandemic and economic crisis hits the same communities the hardest,” said Senator Warren in a statement. “Much of that debt came from predatory for-profit colleges that defrauded students while their executives and owners got filthy rich off of taxpayer dollars with zero accountability. We need a Department of Education that will end this boondoggle, protect students, cancel fraudulent student debt, and… use every tool available to hold college executives and owners who defraud students personally accountable.”
Senator Warren’s statement was issued in light of a new report by Student Defense, a student loan borrower advocacy organization. The report provides a comprehensive review of the Department of Education’s statutory authorities and responsibilities under the law, arguing that those authorities have been under-utilized. The Higher Education Act — which governs much of the federal student loan and financial aid system — contains provisions that give the Department of Education authority to recover financial losses from individuals who “exercise substantial control over [an] institution,” such as via individuals who “directly or indirectly” control a “substantial ownership interest in the institution,” and individuals who are “member[s] of the board of directors, the chief executive officer, or other executive officer of the institution or of an entity that holds a substantial ownership interest in the institution.”
