Senate Democrats Want For-Profit Leaders Held Liable

Several Democratic senators want the U.S. Department of Education to hold for-profit college executives personally liable for student loans discharged because of an institution’s misconduct.

“Despite the Department repeatedly finding that fraudulent for-profit colleges widely mislead [sic] students and misrepresented their costs, ability to transfer credits, and earning potential, their executives continue to take home huge profits,” the lawmakers wrote in a letter to Education Secretary Miguel Cardona. “Too often, students are left saddled with debt and no career path while the executives at these institutions prioritize profits over student outcomes.”

Senators Dick Durbin and Elizabeth Warren, along with several others—all Democrats—sent the letter. They requested an accounting of the government’s losses in connection with approved borrower-defense claims for students at Corinthian Colleges, ITT Technical Institute and several other for-profit institutions, along with the total amount recovered from an individual executive, owner or board member and answers to four other questions. That report is requested by Nov. 1.

As the department has increased its oversight of for-profit colleges in recent years, discharging billions in loans from students who said they were deceived by their colleges, it has not used its authority outlined in the Higher Education Act of 1965 to seek reimbursement, according to the letter.

“As a result, the federal government shoulders the full financial burden of schools’ misdeeds while executives face little personal risk for continuing to take advantage of both students and taxpayers.”

Department officials have said they don’t have the authority to recoup money from the college owners and executives. The senators disagree, writing that the act “expressly authorizes the Department to recoup financial losses from individuals who ‘exercise substantial control’ over institutions, including owners, board members, CEOs, and other executives.”

Ad keywords:
Is this diversity newsletter?:
Disable left side advertisement?:
Is this Career Advice newsletter?:
Live Updates: