Education Dept. Suspends Student-Aid Eligibility for Dozens of For-Profit Programs

[Updated (2/1/2016, 6:39 p.m.) with comment from a Marinello representative.]

The U.S. Department of Education has suspended student-aid eligibility at 26 for-profit education programs, in California, Illinois, and Nevada, after an investigation found several rules violations by the programs, the department announced on Monday.

The programs found in violation were 23 Marinello Schools of Beauty campuses in Nevada and California, with about 2,100 active students, and three Computer Systems Institute campuses in Illinois, with about 2,600 active students. The two chains are both for-profit companies.

According to the department, Marinello knowingly requested federal aid for students based on invalid high-school diplomas and underawarded Title IV aid to students, among other violations. The investigation also found that Computer Systems Institute provided false job-placement rates to its would-be students.

The Marinello chain — which has 56 campuses nationwide — received more than $87 million in Pell Grants and federal loans, while the Computer Systems Institute campuses received approximately $20 million in federal funding, both for the 2014-15 year, according to the department.

In an email to The Chronicle, Joe Hixson, a representative of the Marinello Schools, called the department’s findings “unfounded allegations” and assailed the department for delaying student-aid funds for two months before it specified what the program was alleged to have done wrong.

“While we intend to appeal this decision and while Marinello believes it has done nothing wrong and will defend itself vigorously,” he wrote, “without the federal funds our students deserve, our operations are at risk.”

The Computer Systems Institute has until February 12, and Marinello until February 16, to submit evidence to dispute the findings.

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