Blowing the whistle on for-profit education

Blowing the whistle on for-profit education

It’s been a busy week in student loan litigation news.  In addition to the CFPB suit against ITT, the The New York Times reports that former employees have sued Harris (Premier Education Group), a for-profit trade school in New Jersey.

The complaint (filed in 2011 and unsealed in late 2013) reads like a catalog of the worst practices alleged by critics of the for-profit industry.  The whistleblowers contend that school officials violated the False Claims Act by taking in federal student aid after knowingly enrolling students who could not pass basic literacy exams, falsifying entrance exam grades, passing students out of courses that the students had failed, forging students’ signatures on loan documents, and misleading students about their career prospects and eligibility to sit for professional licensing exams.  If the plaintiffs are successful, the suit carries significant penalties, including treble damages.

This isn’t the first time Harris has been sued. The Press of Atlantic City reports that in March 2011, thirty-seven former Harris students brought suit against the school. Among the alleged violations? Misrepresentation of accreditation status, which meant that students were not eligible to sit for a required professional licensing exam, rendering their degrees worthless.

Wherefore Art Thou, Higher Education Act?

This week’s guest post is contributed by Marie Vanderbilt, a 3L at American University Washington College of Law.  Marie breaks down the past, present and future of the Higher Education Act, the umbrella statute for most federal aid.

Will Congress manage to reauthorize the Higher Education Act of 1965 (HEA) before it sunsets at year’s end? The HEA formed one of the main pillars of the Johnson Administration’s War on Poverty (watch LBJ deliver the 1964 State of the Union, minute 20:20.)  The goal was to ensure that no one would be denied an education because of their financial situation.  The HEA removed financial barriers to higher education by authorizing a program of need-based grants and student-support programs. Since 1965, the HEA has been repeatedly reauthorized, most recently in 2008. Each time, the HEA has been amended, edited, and expanded. However, the foundational belief in the importance of access to education remains.

With Congress deadlocked over the budget, it is hard to imagine a serious conversation about how we should fund our system of higher education.  The Senate HELP Committee held new hearings this past month, at least a glimmer of activity.  The last time, Congress didn’t manage to reauthorize until five years after the deadline.  The purpose of having laws sunset is to open up programs for inspection and debate.  In the case of higher education, that moment will soon be overdue.