Education Department struggled to examine whether colleges were misrepresenting themselves, watchdog finds

Higher Ed Dive

Rick Seltzer

January 13, 2023

Dive Brief:

• A unit within the U.S. Department of Education charged with making sure colleges aren’t misrepresenting themselves to students has been dogged by frequent reorganizations, changing priorities, and staff and leadership turnover, according to a new congressional watchdog report.

• The unit had nine different directors in roughly six years, the Government Accountability Office wrote in a report released Thursday. At one point in 2017, the Education Department placed all of the unit’s open investigations on hold and diverted its staff to other offices. That resulted in fewer new probes over the next several years.

• The Education Department penalized 13 colleges for substantial misrepresentations from 2016 to 2021. Ramifications can range from fines to ending colleges’ participation in federal student aid.

Dive Insight:

Colleges are not allowed to substantially misrepresent their programs, costs or graduates’ employment outcomes. Specific types of false and misleading statements count as substantial misrepresentations, but so do omissions.

Misrepresentations can result in big costs for students and the federal government. Students who rack up larger-than-expected bills and find few employment prospects upon leaving college can find it hard to pay off student loans. And the government can end up forgiving those loans if colleges are later found to have misled students.

In 2016, the Education Department created a Student Aid Enforcement Unit with an Investigations Group. The idea was to bolster oversight of colleges taking part in federal financial aid programs — including any misrepresentations they were making.

But organizational structures changed several times since then. Initially, the head of the enforcement arm reported directly to the head of Federal Student Aid, then the unit was moved down on the organizational chart in 2020, the GAO found. In September 2022, it was moved back up under the head of FSA.

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