Nearly all allegations of fraud submitted to the U.S. Department of Education by students concern for-profit colleges, according to a new report from the Century Foundation.
Data for the report, obtained through a Freedom of Information Act request by the left-leaning think tank, show that 98.6 percent of 98,868 borrower defense-to-repayment claims were from students who said they had been defrauded by for-profit colleges. Most of the claims were made against the now-defunct Corinthian Colleges; however, even when Corinthian was removed from the analysis, for-profit institutions accounted for 94 percent of the claims.
The borrower defense-to-repayment process was created under the Obama administration to give students a simplified way to have their federal loans forgiven if they had been defrauded by colleges. The backlog of unresolved claims, however, now numbers in the tens of thousands.
The education secretary, Betsy DeVos, has often been criticized for her relationship to the for-profit sector. And several critics have cited her decision in June to revise the borrower-defense rule as one example of her friendliness to the institutions.
“Fraud, especially fraud committed by a school, is simply unacceptable,” she said in a news release at the time. “Unfortunately, last year’s rule-making effort missed an opportunity to get it right.”
The first of several negotiated rule-making hearings to rewrite the rule is slated for Monday.