Durbin, Murray, Warren, Brown, Senators Urge Education Department To Protect Students and Taxpayers From Failing Colleges
New report shows Department failed to predict Corinthian's collapse, allowed the for-profit to continue receiving taxpayer dollars
Full text of the letter available here. (PDF)
WASHINGTON, D.C. - After the Department of Education Office of Inspector General (OIG) found that Federal Student Aid (FSA) failed to identify Corinthian Colleges' weak financial situation and allowed the failing for-profit to continue receiving Title IV student aid dollars without restriction, U.S. Senators Dick Durbin (D-IL), Patty Murray (D-WA), Elizabeth Warren (D-MA), and Sherrod Brown (D-OH) led a group of senators calling on Education Secretary Betsy DeVos to implement OIG's recommendations and maintain existing protections for students and taxpayers.
"When Corinthian collapsed amid dozens of lawsuits and investigations from state and federal officials, it was the largest failure of an institution of higher education in American history. There were clear warning signs that the school's instability posed a critical risk to students and taxpayers, but the Department's failure to properly identify Corinthian's financial instability and seek protections to guard against potential taxpayer losses associated with its closure meant tens of thousands of students' lives were disrupted and taxpayers lost hundreds of millions of dollars," wrote the senators in a letter to DeVos. "It is now your responsibility to ensure that these mistakes do not happen again and that proper protections are in place for students and taxpayers."
In addition to Durbin, Murray, Warren, and Brown, the letter was signed by Senators Jack Reed (D-RI), Richard Blumenthal (D-CT), Tom Carper (D-DE), Dianne Feinstein (D-CA), Ron Wyden (D-OR), Al Franken (D-MN), Sheldon Whitehouse (D-RI), Chris Murphy (D-CT), Jeanne Shaheen (D-NH), Tammy Baldwin (D-WI), Mazie Hirono (D-HI), Ed Markey (D-MA), Kamala Harris (D-CA), and Maggie Hassan (D-NH).
The OIG report released late last month reveals that the Department ignored clear signs that Corinthian was manipulating its finances in order to appear more financial stable. The Department also failed to place sanctions on Corinthian, including requiring a letter of credit, once the manipulation was discovered. In response to these findings, OIG outlined recommendations to improve processes for identifying at-risk schools and mitigating losses for students and taxpayers, including strong enforcement of Borrower Defense regulations and aggressive oversight by the Enforcement Unit.
Full text of the letter is available here.
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