Sen. Tammy Baldwin speaks on the Senate floor on Jan. 6, 2022 | Screenshot of video provided by Baldwin’s office Wisconsin Examiner
U.S. Sen. Tammy Baldwin joined five other senators in sending a letter to U.S. Department of Education Secretary Miguel Cardona on Tuesday urging him to use the department’s authority to hold executives and owners of for-profit colleges personally liable for scamming students.
This year, the DOE canceled $96 million in student loans to nearly 5,000 borrowers in Wisconsin who attended ITT Technical Institute after it made “widespread and pervasive misrepresentations” about job placement, credit transfers and program accreditation. Before closing, ITT Tech operated campuses in Madison, Greenfield and Green Bay.
The department also canceled $36 million in loans to more than 3,000 people in Wisconsin who attended Everest College in Milwaukee. The college was operated by Corinthian Colleges, which closed after lying about its job placement rates — which it claimed were as high as 90% but were in fact as low as 5%.
The senators said that under the Higher Education Act the department has the authority to hold the college executives personally liable for the financial damage done to the students. In addition to Baldwin, the group included Sens. Dick Durbin (D-Ill.), Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.) Corey Booker (D-N.J.) and Mazie Hirono (D-Hawaii
“We urge you to use your clear statutory authority under 20 U.S.C. § 1099c(e) to hold school owners and executives personally liable for scamming students and taxpayers and recoup funds related to certain student debt discharges, including closed school discharges, borrower defense discharges, and other discharges premised on misconduct by for-profit institutions of higher education,” the senators wrote. “Despite the Department repeatedly finding that fraudulent for-profit colleges widely mislead students and misrepresented their costs, ability to transfer credits, and earning potential, their executives continue to take home huge profits. Too often, students are left saddled with debt and no career path while the executives at these institutions prioritize profits over student outcomes.”
The letter notes that the department has never exercised this authority and asks a number of questions regarding what actions the department has taken in the past to hold colleges and their executives accountable.
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