The government is doing some spring cleaning, but you can already see that they’re doing more than some light dusting. If you ask them, they’re washing your windows, airing out your dirty laundry, and taking out the trash. You get the point. Is your house in order? If not, better get to work and clear those cobwebs out soon, or they might be taking you out with the trash for bulk pickup.

 Every person who receives this newsletter has, like me, at one point in time or another, wondered if it’s all worth it? If Higher Ed has lost its soul? I’m telling you that it hasn’t. I’m telling you that the good work that you do every day positively changes the lives of every student you serve and their families, often for generations. It’s through good work that you make tremendous positive effects on society. Doing good work is seldom easy, but here’s the secret to success… Doing good work leads to doing more good work.

 Don’t let the bad press trouble you. Be innovative. Be a leader. Be courageous. To take a quote from Gandhi “Be the change you want to see in the world”.

 Speaking of change – if it wasn’t clear before – the game is changing fast…Are you ready?

 In recent weeks, the U.S. Department of Education has taken a series of enforcement actions against schools like DeVry Education Group, Marinello Schools of Beauty, and Computer Systems Institute, citing fraud, misrepresentation, predatory lending and a host of other issues.

As part of the 2017 budget, the President is requesting $13.6 million to strengthen FSA’s enforcement and oversight activities through a newly created “Student Aid Enforcement Unit” of the Department of Education. The enforcement unit will increase coordination between four divisions within ED, with the goal of building cases against institutions of higher education.

  • Investigations Group — to identify potential misconduct or high-risk activity among higher education institutions and protect federal funding.
  • Borrower Defense Group —to provide legal analysis, support and advice concerning claims of borrowers of Direct Loans. The unit will analyze claims to make determinations of injury, investigate institutions in connection with borrower defense claims and coordinate with federal and state agencies regarding those claims.
  • The Administrative Actions And Appeals Service Group (AAASG) –to impose administrative actions such as Emergency, Termination, Limitation, Suspension or Fine actions. This group will continue to resolves appeals by program participants from final audit and final program review determinations, initiate debarment and suspension actions, and issue school revocation and denials of re-certification.
  • Clery Group — to ensure institutions comply with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, requiring colleges and universities participating in federal financial aid programs to disclose campus crime statistics and security information.

 The unit will also collaborate with the Program Compliance Unit regarding evidence which may impact ongoing program compliance reviews. Moreover, the new Investigations Group will utilize a broad set of interventions and tools, including subpoena authority, document demands, and interrogatories and interviews to enforce against violations of federal law.

Meanwhile, the Consumer Fraud Protection Bureau (CFPB) is also stepping up their oversight and enforcement efforts and recently published a memo outlining their short term enforcement goals which reach well into the heart of the education sector.

 Among their priority goals, the agency seeks to crack down on a number of issues including arbitration agreements, which are commonly used on school enrollment agreements, wrongful debt collection practices, financial literacy, installment loans and student lending. This is the same agency that along with the FTC, has oversight authority for schools subject to the Truth in Lending Act (TILA) Regulation Z, so if you’re making loans (including certain payment plans) to students, the CFPB, can come knocking anytime.

Last summer, the agency also sent a Civil Investigative Demand to the Accrediting Council for Independent Colleges and Schools (ACICS) in connection with the colleges and schools in accredits. ACICS refused their request and has filed a federal filing seeking to have the CFPB drop their investigation. The agency has indicated that they want to hold individuals that participated in school visiting teams (i.e. Peer Reviewers) and accrediting commission council officials directly responsible for their role in reaccrediting schools with known issues. It’s an undeniably unprecedented move, but the agency is only five years old and has very broad authority under the Dodd-Frank Act to police all markets for compliance with consumer financial law and regulations. They believe that their jurisdiction extends to bodies like ACICS by way of enforcing consumer protection.  Everyone is watching this closely and my guess is that it’s going to get ugly.

Worried about your school? Should be. As I said earlier, the game has officially changed. And if you aren’t adapting, the consequences will be devastating. Just like anything in life, preventative maintenance and regular checkups are the best safeguards. So take a moment this spring to get your house in order.

 Not sure where to start? Not sure what to do? Let’s Talk!

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 Make a Great Day!

Peter Terebesi

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