April 08, 2020

Warren, Durbin, Colleagues Push Education Department to Target CARES Act Funding to Public and Nonprofit Colleges, Not For-profit Colleges

Senators call for strong accountability policies to ensure funding meant to aid students is protected from predatory for-profit colleges

Text of Letter (PDF)

Washington, D.C. -- United States Senators Elizabeth Warren (D-Mass.), member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Senate Democratic Whip Dick Durbin (D-Ill.), along with Senators Sherrod Brown (D-Ohio) and Richard Blumenthal (D-Conn.), sent a letter to the Department of Education (ED), requesting clarification on whether it will allow for-profit colleges to be eligible for funding in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which establishes the $14 billion Higher Education Emergency Relief Fund to aid students and stabilize colleges and universities impacted by the coronavirus disease 2019 (COVID-19). Senators encourage ED to use its authority to target funding to public and nonprofit colleges, and issue strong accountability policies to support students and protect taxpayers, including policies to prohibit for-profit colleges from using funding for any purposes that boost their profits or do not directly aid students. 

The lawmakers urge ED to include strong accountability policies in their guidance if ED determines that for-profit colleges are eligible for this funding and specifically asked ED to include the following policies to protect students and taxpayers:

1.     A requirement to use 100% of the funding for student instruction, emergency financial aid to students, and student support services central to the educational mission.

2.     A ban on for-profits using funds for executive compensation and requirement that for-profit colleges that receive funding to freeze executive compensation.

3.     A ban on publicly-traded for-profit colleges that receive funds from buying back stock. 

4.     A ban on for-profits using funds for any advertising, marketing, or recruitment purposes. 

5.     A ban on for-profits that receive higher ed CARES Act funds from seeking additional stimulus funds from other sources authorized by the CARES Act.

6.     Consider CARES Act funding as federal funding for 90/10 compliance.

7.     Report to Congress how for-profit colleges used the funds. 

The lawmakers have requested responses to their letter by April 21, 2020.

Since the beginning of the COVID-19 outbreak, Senator Warren has pressed the Trump Administration to respond effectively to deliver the robust set of resources, both medical and financial, needed to address this emergency. Yesterday, she and Senator Brown led their colleagues in calling on  student loan companies to allow private borrowers to suspend payments without penalty and discharge loans for those in financial distress. She and Rep. Ayanna Pressley (D-Mass.) also led their colleagues in advocating for broad cancellation of student loan debt as part of the coronavirus relief package and also pushed for the basic protections that ultimately passed into law.