Education Department settles with 5 law schools that it said improperly distributed financial aid

Higher Ed Dive

Jeremy Bauer-Wolf

August 24, 2023

Dive Brief:

• The U.S. Department of Education announced Thursday it struck settlement agreements with five law schools that the agency said improperly disbursed federal financial aid to students in unaccredited programs.

• Albany Law School, in New York, Atlanta’s John Marshall Law School, Brooklyn Law School, New England Law Boston, and New York Law School improperly distributed almost $2.9 million in Title IV money between July 2017 and June 2022, the Education Department said.

• Under the settlements, the five institutions will reimburse the Education Department’s “expected loss” for the allegedly misused funds, and three of them will pay fines, the highest being $120,000. An Education Department spokesperson said Thursday the colleges are not reimbursing the agency for the full $2.9 million, but did not provide a precise figure.

Dive Insight:

The Biden administration has aimed to hold institutions financially accountable as part of its higher education platform.

It has homed in on for-profit institutions especially, devising a regulation known as gainful employment that requires career education programs to pass debt-to-earnings tests to receive federal aid.

However, just one of the institutions that settled, Atlanta’s John Marshall Law School, is for-profit, signaling the White House’s willingness to go after a wide range of colleges.

“Today’s actions demonstrate our commitment to protect the integrity of the federal student aid programs,” Richard Cordray, chief operating officer of the Office of Federal Student Aid, said in a statement Thursday. “Through our ongoing work, we will continue to protect both students and taxpayers.”

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