Department Of Education Has Let Colleges Off From Paying More Than $1 Billion Owed To Taxpayers

A report by a nonprofit advocacy group shows the federal government has failed to collect more than $1 billion in fines and other money owed by colleges.

The National Student Legal Defense Network (NSLDN) reviewed two years of documents through Freedom of Information Act requests and found almost 1,300 colleges across the country that owe money in fines and penalties to the Department of Education.

The NSLDN, which was founded by former Education Department officials, say the agency has failed to use its entire war chest from owners and colleges while at the same time requiring students to pay off their debts.

“The Department of Education continues to spend time and money opposing struggling student borrowers while doing nothing to collect more than $1 billion owed to the government by colleges and for-profit companies,” National Student Legal Defense Network vice president and chief counsel Dan Zibel told CNN.

There are a wide range of reasons colleges owe the fines and penalties, including misconduct and loan discharges resulting from a college’s closure, or from making false statements regarding job placement after a student finishes.

These colleges can also be cut off from federal funding as a result of the fines, however the NSLDN found  more than 200 colleges that owe money to the Education Department received money during the 2019-2020 school year.

Democrats have been pressuring President Joe Biden to find a way to cancel student loan debt for Americans. Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) have continuously pressed Biden to cancel up to $50,000 in relief for all Americans. Warren and Schumer recently began a second push for Biden to extend the pause on student loan payments until 2022.

Biden hasn’t committed to either ask, but earlier this month the president canceled $1.5 billion in loans for borrowers who attend the now-closed ITT Tech and other for-profit institutions.

For other student loan borrowers, Biden has directed the Education Department to look into the possibility of using an executive order to cancel student loan debt. However, more than two months later, the department and Biden have not commented on the situation.

 

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