NEW: College Fraud Claims Up 29 Percent Since August 2017
by Yan Cao and Tariq Habash, The Century Foundation
The Century Foundation (TCF) has obtained updated data, from early March, about “borrower defense” claims-applications for loan relief from students who maintain that they have been defrauded or misled by federally approved colleges and universities. The data were provided by the U.S. Department of Education in response to a FOIA request.
Compared to the data we analyzed in August 2017, the new data show an increase of 29 percent in these fraud claims, from 98,868 to at least 127,817 (a precise total cannot be determined from the format of the data provided by the department). As with the prior data, more than 98 percent of the complaints are regarding for-profit colleges, many which have been under law enforcement investigations or have since shut down.
The largest increase for any single school was for the online campus of DeVry University, which saw its borrower defense claims increase from 1,195 in August to 7,393 in the March data. The owner of DeVry, Adtalem Global Education, has proposed to sell the large online school to an investment firm that owns a small for-profit college in California. In a letter to regulators, consumer groups have raised questions about the sale, citing the borrower defense data.
Nearly all institutions categorized by the department as public or nonprofit have only a few, if any, fraud claims from former students. There are exceptions, however. The three nonprofit schools with the largest number of fraud claims are colleges that converted from for-profit several years ago but, evidence indicates, never actual shifted control from the owners to disinterested trustees……
In filing borrower defense complaints, borrowers must declare, under penalty of perjury, that their school misled them or engaged in other misconduct-such as using false job placement rates, lies about credit transfer, or unrealized promises about the nature of the instructional program-that had a financial impact on the student. The department has not released details about these complaints and has ceased investigating unlawful practices described therein. But analyses of borrower defense complaints filed by over 2,000 students who attended ITT Tech and nearly 200 students who attended Wright Career College, provided by attorneys for those respective student groups, show consistent misrepresentations by for-profit and covert for-profit colleges about costs and debt, educational quality, and employment outcomes……..
https://tcf.org/content/commentary/college-fraud-claims-29-percent-since-august-2017/
