Student Loan Advocacy Group Pushes Department of Education to Increase Oversight of For-Profit Colleges and Contractors – JD Supra
The Student Borrower Protection Center (SBPC)—an organization established by former CFPB Student Loan Ombudsman Seth Frotman—recently published an article examining the Department of Education’s oversight of “lead generators.” Lead generators are outside entities that help for-profit colleges manage “pre-enrollment activities” such as “recruiting and advising students,” “determining eligibility for federal aid,” and “delivering the Title IV funds.” The article highlights state and FTC enforcement actions against lead generators and suggests that these entities qualify as third-party servicers under Department of Education regulations.
The article characterizes the Department of Education’s current oversight of the industry as “haphazard and wholly inadequate.” It calls on the Department to (1) treat lead generators as third-party servicers, (2) require that schools disclose contracts with lead generators, and (3) compel lead generators to conduct annual compliance audits.