![]() The guidance released Thursday aims to clarify the grounds and means by which the for-profit executives will be held personally liable. Officials to focus on 'risky' for-profit colleges, executives More to come: Millions of borrowers have had billions in student loan debt erased. Last year, per POLITICO, Kvaal wrote a letter to one Democratic congressman explaining: “There is no clear path to collect liabilities from entities or individuals associated with the shuttered institutions.” With salaries in the multiple millions, the executives were hit with relatively small fines.īecause the leaders hadn't signed agreements confirming their institutions' participation in the student loan program, the department said it had no way of holding them accountable. When Corinthian collapsed, for example, it was the Securities and Exchange Commission that ended up punishing leaders for their harm to shareholders. ITT Tech students to get $4 billion in federal loan forgiveness: What borrowers should knowīut the Education Department’s emphasis until recently has been on helping borrowers rather than going after executives. Amid revelations that for-profit trade schools were producing significant rates of loan defaults, Congress passed a law allowing the education secretary to make these leaders pony up. “Congress gave the Department the authority to make college owners and operators personally responsible for these losses in certain circumstances and we are going to use that authority to hold them accountable, defend vulnerable students, protect taxpayer dollars, and deter future risky behavior.”Īs NPR reported, concerns about the role of leaders in fostering these practices trace back to the 1990s. ![]() “Too often, the owners and executives of these colleges escape liability,” Under Secretary James Kvaal said in a statement. Who's accountable for the student debt crisis? ![]() Stratford University to close with little warning: It blames the Education Department for its end. Student loans forgiven: Billions in student loans erased for students preyed upon by Corinthian Colleges Now, the department says it's time for the people who run predatory institutions to pay up. Hundreds of thousands of these borrowers have already had billions in student loan debt erased.īut little has been done to hold the colleges' executives accountable for their behavior. Thanks to various settlements, borrowers who attended these schools, such as ITT Tech and Corinthian Colleges, potentially qualify for loan forgiveness. Several for-profit colleges shuttered suddenly in recent years , after their ability to enroll new students who rely on federal student aid was cut off. Leaders of private, largely for-profit colleges that don't operate responsibly will be personally liable for their contributions to the student loan debt and default crisis, the Education Department said Thursdayįor-profit colleges have faced scrutiny for decades, including over their predatory practices and targeting of veterans, abuse of public funding and high percentages of students who leave unable to pay off their debt. Watch Video: White House end $5.8 billion in Corinthian Colleges student debt ![]()
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