Letter to ED and DOJ questions lack of accountability for company executives and inadequate relief for defrauded students
Washington, DC –(ENEWSPF)–December 1, 2015. In a letter to the Department of Education (ED) and Department of Justice (DOJ), United States Senators Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.), and Richard Blumenthal (D-Conn.) raised concerns about the federal government’s recent settlement with Education Management Corporation (EDMC) over illegal recruiting tactics. The senators questioned the settlement’s lack of accountability for company executives and inadequate relief for students.
“We are profoundly dissatisfied with a settlement in which the government recovered a miniscule fraction of stolen taxpayer funds, held no individuals accountable while failing to even obtain an admission of wrongdoing from EDMC, and now may not even provide relief to thousands of students who owe billions of dollars in student loans because they were illegally recruited by EDMC,” the senators wrote.
Although ED has broad authority under the law to forgive borrowers’ student loans when institutions engage in fraudulent activities, and currently is reviewing thousands of cases where borrowers who attended Corinthian Colleges may be eligible for forgiveness, Education Secretary Arne Duncan has not committed to providing EDMC students with loan relief.
“It is clear that EDMC’s predatory practices caused material harm to its students, and we urge the Education Department to use its authority and all available evidence of EDMC’s fraudulent behavior to provide these students the full, immediate debt relief afforded by the law,” wrote the senators. The letter notes that state Attorneys General secured approximately $100 million in debt relief for borrowers of EDMC’s private loans in a separate settlement, providing evidence of wrongdoing that appears to be grounds for discharge of federal loans.
Read a PDF copy of the letter here.