U.S. Education Department resurrects student-aid enforcement unit disbanded by Betsy DeVos

WASHINGTON — A Barack Obama-era enforcement unit dismantled by the Donald Trump administration is being resurrected at the Education Department to investigate colleges engaging in fraud and abuse of federal student aid.

“Vigorously ensuring that schools are adhering to the federal student aid program rules and delivering quality education to students is critical in America’s

ability to build back better,” Undersecretary James Kvaal said in a statement Friday. “The administration will prioritize Federal Student Aid’s effective oversight and enforcement of postsecondary schools.”

Reestablishing the unit, created in 2016, signals that the Biden administration will resume Obama-era efforts to root out abuses at for-profit colleges, a campaign criticized by Republicans and one that led to the demise of the unit.

Before Trump entered office, the enforcement team, including lawyers and investigators, was probing deceptive recruitment and marketing practices at a number of forprofit schools, including those owned by DeVry Education Group (now known as Adtalem Global Education).

The DeVry investigation ended shortly after Trump took office, and months later his education secretary, Betsy DeVos, named Julian Schmoke Jr., a former DeVry University dean with no legal or investigative expertise, to lead the student-aid enforcement unit.

By May 2018, the New York Times reported that members of the unit had been reassigned or instructed to focus on smaller compliance cases and processing debt-forgiveness applications. Investigations went dark. And a unit once staffed with dozens of attorneys was left with three.

The department denied that Schmoke had any influence on the unit’s work and said that the reshuffling of duties did not undermine its oversight of colleges.

Congressional Democrats were incensed and accused DeVos of capitulating to the for-profit industry. At a hearing in 2018, Sen. Richard Durbin, D-Ill., grilled DeVos for gutting the unit to the detriment of students.

The enforcement unit will consist of four divisions.

The investigations division will collaborate with state and federal authorities to examine potential misconduct or high-risk behavior by colleges and their third-party partners, according to the department.

Another division will handle terminations, suspensions and appeals, while a third group will resolve school disputes.

The unit will also manage debt-relief claims made through the borrower defense to repayment program. Students are entitled to a discharge of their debt when their college uses illegal and deceptive tactics to persuade them to borrow.

Kristen Donoghue, the former enforcement director at the Consumer Financial Protection Bureau during the Obama administration, has been tapped to run the unit. She will report to Richard Cordray, chief operating officer of the Office of Federal Student Aid and Donoghue’s former boss at the bureau.