Exclusive: These for-profit colleges could reap up to $1 billion in federal bailout money – Market WatchA
Some eligible schools have been accused of fraud and misuse of federal student aid
Dozens of for-profit colleges that are among those most likely to benefit from stimulus funding face thousands of claims from students demanding their money back because they say they were defrauded, according to analysis prepared for MarketWatch.
Some of the schools eligible for bailout funds also face federal scrutiny for mismanaged funds, while others have been dubbed “failed” under a federal standard requiring them to provide an education adequate for repaying loans, the analysis shows. Some schools eligible for bailout funds have settled lawsuits with the U.S. Justice Department following allegations of fraud and misuse of federal student aid.
The exclusive analysis echoes concerns about the amount of funding available to the for-profit education sector. In an April 6 letter to Education Secretary Betsy DeVos, a group of U.S. senators argued that for-profit colleges should not be eligible for stimulus money. The letter — sent by Democratic Party senators Elizabeth Warren of Massachusetts, Richard Durbin of Illinois, Sherrod Brown of Ohio and Richard Blumenthal of Connecticut — demanded “strong accountability policies to support students and protect taxpayers.”