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Student Defense and Senator Elizabeth Warren Call on Department of Education to Hold Owners & Executives of Predatory Colleges Personally Accountable

WASHINGTON, DC – Student Defense and Senator Elizabeth Warren today called on the U.S. Department of Education and Secretary Betsy DeVos to hold college owners and executives personally liable for their schools’ predatory and reckless conduct. The statements came alongside the release of a new Student Defense paper, a comprehensive review of the Department’s statutory authorities and responsibilities under the law and how those authorities have gone unused in the past. The paper also serves as a roadmap to how a future Administration could reinvigorate enforcement and accountability when for-profit colleges take advantage of students.

“Millions of Americans are being crushed by over $1.5 trillion dollars in outstanding federal student loan debt, with Black and Brown communities disproportionally impacted, especially as the COVID-19 pandemic and economic crisis hits the same communities the hardest,” said Senator Warren. “Much of that debt came from predatory for-profit colleges that defrauded students while their executives and owners got filthy rich off of taxpayer dollars with zero accountability. We need a Department of Education that will end this boondoggle, protect students, cancel fraudulent student debt, and, as Student Defense's report shows, use every tool available to hold college executives and owners who defraud students personally accountable.”

“Time and again, we have seen owners and senior executives of predatory colleges take enormous paydays, while leaving devastated students and taxpayers to pick up the pieces,” said Student Defense Vice President and Chief Counsel Dan Zibel, who coauthored the report. “In 1992, a bipartisan Congress gave the Department the statutory authority to hold owners and executives liable for financial losses. It is long past time for the Department of Education to step up and finally use its powers to hold bad actors personally accountable.”

“Protection and the Unseen: Holding Executives Personally Liable Under the Higher Education Act” is available here.

The new paper, by Student Defense Vice President Dan Zibel and Senior Counsel Alice Yao, is part of the 100 Day Docket initiative, which will help a future Department of Education take immediate, decisive action to protect students. Student Defense is publishing a series of papers identifying opportunities for the Department of Education to exercise underused authorities in the Higher Education Act to promote equity and foster stronger protections and outcomes for students. Papers so far include how the Department can establish robust accountability metrics to require schools to foster equity, how to fix the Public Service Loan Forgiveness program, and how to deliver overdue loan relief to over 350,000 disabled borrowers.

More information about the project is available at www.100DayDocket.org