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Grewal: Feds turning blind eye on for-profit college fraud

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New Jersey Attorney General Gurbir Grewal has written in a letter to the U.S. Department of Education that federal education officials have deliberately been neglecting their role in cracking down on fraudulent activities by for-profit colleges.

The state’s top cop said he was concerned that education officials were allowing those efforts to “end prematurely” or “grow dormant.”

In his letter sent Thursday to Education Secretary Betsy DeVos, Grewal said her department should either renew its investigation efforts or hand them off to New Jersey, supplying any relevant materials and documents along the way.

Grewal also expressed concern that her department was ignoring his office’s inquiries and no longer cooperating with it in investigating Corinthian Colleges Inc., a bankrupt for-profit chain that misrepresented its job placement numbers.

“Last year, New Jersey partnered with the Department of Education in its efforts to notify students who attended schools operated by Corinthian that they are eligible for cancellation of their federal student loans,” Grewal said.

Over 2,200 New Jersey residents were deemed eligible for student loan cancellation, Grewal said, but not all of them applied for relief.

“In order for New Jersey to continue outreach to those Corinthian students who have not applied for relief, we need information from the Department of Education as to which New Jersey students who have already submitted a claim,” Grewal wrote.

Grewal also brought up concerns over the department’s investigations into another for-profit college, DeVry University, which in 2016 agreed to a $100 million settlement with the Federal Trade Commission.

“In recent years, the federal government and State Attorneys General have worked —sometimes together — to investigate false advertising and predatory conduct by educational institutions, to prevent its recurrence and to obtain compensation for affected students,” Grewal wrote.

Recent reports have suggested a regulatory arm within the education department tasked with monitoring for-profit colleges for fraudulent activities had been cut to the bone, with remaining staff directed to focus on student loan forgiveness efforts.

That team was created in 2016, following revelations into fraudulent activities by several different for-profit colleges.

“If the federal government will not pursue these investigations wherever the facts and the law take them, let us pick up where you leave off,” Grewal wrote. “Give the New Jersey Attorney General's Office access to your Department’s files.”

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Daniel J. Munoz

Daniel J. Munoz

Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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