Fraud in For-Profit Education
Fraud in For-Profit Education

The Higher Education Act of 1965 (“HEA”), including Title IV, was signed into law by then President Lyndon Johnson. The law was intended “to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education.” Unfortunately, the Title IV program has since been the subject of excessive fraud, waste, and abuse by unscrupulous corporations who have put ill-gotten profits above the public good.

There are a variety of federal statutes and regulations that govern the award of Title IV, HEA program funds. For example, only “eligible” students are permitted to receive federal financial aid. In order to qualify as an eligible student, a student must have a high school diploma or its recognized equivalent, and must maintain satisfactory academic progress. Some schools falsify high school equivalency to enroll unqualified students, or alter grades of their students to ensure they continue to qualify for federal loans. 

Furthermore, a school may only retain Title IV funds that it earns. When a student withdraws, the school must promptly return any remaining Title IV funds to the Department of Education. Some schools falsify attendance records to delay having to return Title IV funds when a student stops attending.

Federal regulations also prohibit institutions from misrepresenting job placement rates of graduates. Unfortunately, many for-profit schools do not provide a degree that allows graduates to easily find work—let alone well-paying work. Many graduates end up with, at best, minimum wage jobs. In order to continue qualifying for federal funding, these schools falsify placement data to make it appear to students, and the government, that their graduates are able to find solid jobs in the industries for which they are trained. 

All of these fraudulent schemes, and others, can be brought to light by whistleblowers under the False Claims Act. CPM is currently prosecuting and investigating several for-profit schools for these schemes and others, on behalf of whistleblowers. If you are aware of any information about such practices, please contact us at the links above.


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