Education Department Revives Enforcement Office

• A new Education Department office will investigate fraud among programs that receive federal student aid.
• The enforcement office had been largely sideline during the Trump administration.
• The former head of the Consumer Financial Protection Bureau will lead the new office.
• The department's action has drawn support from a top Democratic senator.

The U.S. Department of Education is reasserting its oversight of postsecondary schools that participate in federal student loan programs.

Under Secretary James Kvaal announced last Friday that the department would reestablish its Office of Enforcement within Federal Student Aid to "vigorously" ensure that schools adhere to the federal student aid program rules and deliver quality education to students.

The office was first established by the Obama administration in 2016, but was gutted by Trump administration Education Secretary Betsy DeVos. It will be led by Kristen Donoghue, who previously served as the enforcement director of the Consumer Financial Protection Bureau.

The move was welcomed by Senate Majority Whip Dick Durbin, D-Ill.

"Reestablishing an aggressive enforcement office at the Department of Education is key to holding for-profit colleges accountable and protecting students and taxpayers," Durbin said in a news release. "For-profit colleges essentially ran the Department for four years under Donald Trump and Betsy DeVos. With this announcement, President Biden and Secretary Cardona are making clear that those days are over."

The office aggressively worked to root out abuses at for-profit colleges during the Obama administration. Those efforts, however, were criticized by Republicans. The Trump administration reduced the office, once staffed by a dozen lawyers and investigators, to three people.

“Reestablishing an aggressive enforcement office at the Department of Education is key to holding for-profit colleges accountable and protecting students and taxpayers”
— Dick Durbin, Senate Majority Whip, D-Ill.

Under the Trump administration, the enforcement office also shifted focus and dropped an investigation into deceptive practices at some for-profit schools. Julian Schmoke Jr., a former dean at the for-profit DeVry University, was appointed to lead the Student Aid Enforcement Unit despite his lack of investigative experience. DeVry had been previously investigated by the Education Department under the Obama administration.

The reestablished Enforcement Office will comprise four divisions. An investigations unit will work with other agencies, such as the Consumer Financial Protection Bureau, the Federal Trade Commission, and state attorneys general, to examine "potential misconduct or high-risk conduct by postsecondary institutions and third-party servicers," according to the department's news release.

A second unit will manage fines, suspensions, and other punitive actions against postsecondary institutions receiving federal student aid, while the third unit will track reports of suspicious activity and complaints about institutions. The fourth unit will oversee debt-relief claims lodged against schools found to have used deceptive or illegal tactics to persuade students to borrow money.

Donoghue will report to Federal Student Aid's chief operating officer Richard Cordray, whose office she joined in July as a senior advisor. While at the Consumer Financial Protection Bureau, Donoghue's staff pursued hundreds of investigations and secured the bureau's largest civil fine of $1 billion against Wells Fargo.

"Kristen brings a strong enforcement track record to this role," Cordray said. "Her experienced leadership will drive greater accountability for schools and better educational outcomes for the students we serve."

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