U.S. Senators Elizabeth Warren (D-MA), Maggie Hassan (D-NH), and Chris Murphy (D-CT), all members of the Senate Health, Education, Labor, and Pensions (HELP) Committee, sent a letter on Tuesday to Education Secretary Betsy DeVos urging the department to hold the owners of for-profit colleges personally and financially liable for the cost to the federal government if the colleges are found to have defrauded their students and then closed. The letter is also signed by Senators Sherrod Brown (D-OH), Dick Durbin (D-IL), and Richard Blumenthal (D-CT).
The move comes as some, including former members of the Obama administration, are preparing to push the Education Department under a Biden administration to aggressively use its powers to crack down on for-profits, should the Democratic presidential candidate win next week's election, reported Inside Higher Ed.
"It is simply inexcusable for the Department to continue to allow corporate executives to profit from school closures when Congress has given it the explicit duty and additional authority to seek compensation from those very individuals. The Department, however, has failed to discharge its duties and exercise its authorities provided under law, leaving students and taxpayers on the hook for more than a billion dollars in losses in the last few years alone," the lawmakers wrote.
The Higher Education Act, "gives the Secretary of Education both the obligation to pursue any student loan discharge resulting from school closure 'against the institution and its affiliates and principals' and the additional authority to recover these losses from individuals who exercised 'substantial control' over these institutions, including individuals who have an ownership stake and those who served as members of the board of directors, the CEO, or in other positions with substantial control," the senators wrote.
"Historically, the Department has failed to hold owners and executives of for-profit colleges that defrauded students financially accountable, despite having the clear legal authority to do so," the letter said.
The lawmakers asked the Department to respond to their letter no later than November 9, 2020.
U.S. Senator Elizabeth Warren's Press Release
Inside Higher Ed