January, 2022
Washington — For those following the nation's student loan crisis, and the role of colleges and universities in it, a new lawsuit illuminates how financially needy students are shortchanged by what is called "enrollment management."
The lawsuit, against sixteen institutions called the "568 Cartel," is receiving much national attention. The plaintiffs describe enrollment management as a "largely secretive practice" the purpose of which is to raise the net price of tuition for those with financial need.
What the lawsuit does not mention — perhaps because it is obvious — is that the institutions expect students to pay higher tuition with student loans. Nor does it mention that enrollment management is widely practiced throughout higher education and is a major contributor to borrowers' current (and counting) $1.7 trillion student loan debt.
I'm hopeful that subsequent media coverage will recognize that under federal law, these practices must be disclosed to students under the Student Right to Know law, and the Secretary of Education has the power to bring institutions into line through limitation, suspension, or termination of institutions' participation in federal student aid programs — the "L S & T" powers.
In Senate testimony in 2007, I addressed these problems in considerable detail and recommended that they be resolved. The testimony is still available on the webpage of the committee that heard it.
Subsequently, in a later blog post entitled "'Enrollment Management' is Out Of Control," I again pointed out the problems and identified the Secretary of Education's powers to deal with them.
But nothing happened, which brings us to the current litigation, which is directed to just the tip of the iceberg.
The whole imbroglio could be straightened out by the Secretary of Education, whom I believe has an obligation to act against illegal enrollment management practices, wherever they exist. This mess did not happen on the current secretary's watch, but he is now in a position to take decisive action. There is no excuse to say no one knew what has been happening.
