Scott Calls on Education Department to Hold Executives Personally Liable for the Cost of For-Profit School Closures

August 17, 2021
Press Release
Letter comes days after abrupt and potentially costly closure of the Center for Excellence in Higher Education

As originally released by the Committee on Education & Labor

WASHINGTON, DC –Education and Labor Committee Chairman Bobby Scott sent a letter urging the Department of Education to hold the executives of failed for-profit colleges and converted for-profit colleges personally liable for money the institution owes to the federal government.

Committee investigations—including a 2020 report on the defunct Dream Center Education Holdings—have found that, when fraudulent for-profit and converted for-profit schools have abruptly closed, college executives have escaped financial liability at the expense of students and taxpayers. In the letter, Chairman Scott reaffirmed the Education Department’s authority and responsibility to use individual liability to seek relief for defrauded students and deter for-profit institutions from defrauding students in the future. 

In recent years, when major for-profit college chains, such as Corinthian Colleges, Inc. or ITT Technical Institute, have closed under the weight of federal and state law enforcement investigations, it is the students and taxpayers that have borne the financial burden. Our students and taxpayers deserve better,” wroteChairman Scott. “The purpose of holding individuals accountable is to ensure not only that there is accountability for the matter at hand, but also that future misconduct is curtailed, either by the same individuals or others.  It is clear the Department has a responsibility to pursue any and all legal avenues available to recoup money that was allocated through financial aid programs.”

The letter comes days after the abrupt collapse of the Center for Excellence in Higher Education (CEHE)a chain of converted for-profit schools that had been sanctioned in 2020 for fraud by the Colorado government. These sanctions included holding CEHE’s Chairman Emeritus Carl Barney and ex-CEO Eric Juhlin personally liable.  As the Department performs its Final Program Review Determinations of the CEHE schools, the letter urges the Department to review and utilize all available avenues to make students and taxpayers whole, including imposing personal liability.

To read the letter, click here.

To read the Committees’ report on Dream Center Education Holdings, click here.

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