An Enforcement Office to Combat College Fraud, At Last

February, 2016

Washington -- "Long overdue..." "Better late than never..." Those are my sentiments exactly upon learning that the U.S. Department of Education is finally going to estblish an office to crack down on college fraud. What took so long?

Some of us have been making suggestions along these lines for a long time, especially with regard to for-profit schools. I've previously written to ask the Secretary to use his program review teams to look at fraud, waste, and abuse at any and all institutions -- regardless of ownership -- that misuse "enrollment management" techniques to subvert the purposes of student aid programs under Title IV of the Higher Education Act. If the program review teams find evidence of intentional financial aid "gapping" of low-income students to discourage their enrollment, or intentional displacement of federal student grant funds to fund other institutional priorities, or any number of similar gimmicks that have become a cancer on enrollment management and cost taxpayers billions of dollars, he should use his statutory powers to give institutions notice to change their ways or be dropped from Title IV participation.

Federal funds must be used at colleges for the statutory purposes for which they are appropriated. It is also axiomatic that colleges cannot do indirectly what they cannot do directly with federal funds. College manipulation of federal funds amounts to misappropriation. The Secretary has clear statutory authority under his Limitation, Suspension, and Termination powers to send signals to institutions to cease misappropriation practices.

A question arises about where in the Department of Education the new office should be located. If it is located at the office of Federal Student Aid (FSA), there must be safeguards to protect against a conflict of interest, inasmuch as FSA has organizational lines of authority reflecting orientation toward so-called partnerships with institutions at the expense of enforcement. Unfortunately, FSA has given its blessing (or looked the other way) more than once to practices that are wasteful and even fraudulent. I know from first-hand experience; I have witnessed suppression and misuse of program review team findings on more than one occasion within FSA.

It is noteworthy that Congress has seen fit to keep the research and evaluation function (such as it is at the Institute for Education Sciences, where I used to work) separate from both FSA and from the Office of Postsecondary Education. Researchers and evaluators must be independent, of course, to be credible. Why not the new enforcement office as well? Should it not be somewhere outside of FSA?