Report: Education Department Hires Enforcement Chief
August 30, 2017
The Obama administration created the Student Aid Enforcement Office in February 2016. Its goal, the department said, was to respond more quickly to complaints about potentially illegal or fraudulent actions by colleges. The new unit’s primary focus has been the for-profit sector. Robert Kaye, an enforcement lawyer for the Federal Trade Commission, moved over to head the office. Kaye left that position this year, however, after President Trump’s inauguration. (In May DeVry changed its name to Adtalem Education Global Education Inc.)
Last year DeVry Education Group settled with the department and the FTC over allegations that it had used an incorrect, aggregate job-placement rate of 90 percent that dated to 1975 — a “since 1975” claim — for graduates within their field of study. The company’s $100 million settlement of the FTC’s lawsuit included a $49 million payment to the commission, which used that payment to refund DeVry students. The rest of the $100 million settlement went to forgiving former students’ loans and outstanding payments.
The department’s resulting sanction of the company included tighter scrutiny of its finances, a penalty called hightened cash monitoring.
DeVry in February settled with New York’s attorney general for $2.25 million over allegations that it had made false claims in advertisements about graduates’ job placement and salaries.
The company won some praise from for-profit critics last year for opting to voluntarily limit the amount of federal money all of its institutions receive — including student aid and tuition benefits for students who are veterans and active-duty members of the U.S. military — to 85 percent of its revenue. Federal regulations prevent for-profits from cresting a 90-percent limit for revenue coming from federal sources, and that threshold does not include veterans’ benefits, which are exempt from the so-called 90/10 rule. The former DeVry also dropped a requirement that its students enter into arbitration rather than suing over disputes, a reform favored by consumer groups.