• The Enforcement Office of Federal Student Aid (FSA) will use undercover officials to monitor colleges and universities for misleading or predatory practices, the Department of Education announced on Tuesday.
• The officials will identify any “misrepresentations” in several factors advertised to students including “transferability of credits, job placement rates, completion and withdrawal rates, graduates’ future earning potential, career services, the cost of attendance, the amount of federal student aid, and accreditation status.”
• “We support reasonable practices that hold all institutions accountable for misrepresentations that financially harm students and taxpayers; however, the federal government has a track record of using secret shopper investigations to malign politically unfavored institutions with distorted findings that later result in the need for public correction,” Nicholas Kent, Career Education Colleges and Universities chief policy officer, wrote in response to Tuesday’s announcement.

The Biden administration will disguise agents as students to catch colleges and universities that are misleading students, according to the announcement, the Department of Education (DOE) announced on Tuesday.

The Enforcement Office of Federal Student Aid (FSA) will use “secret shoppers” to ensure that higher education institutions are complying with federal laws regarding financial aid, recruitment and enrollment and that they are not misleading or preying on students, the announcement reads. The agents, posed as students at the institutions, will identify any “misrepresentations” in several aspects that colleges and universities advertise to recruit and retain students including “transferability of credits, job placement rates, completion and withdrawal rates, graduates’ future earning potential, career services, the cost of attendance, the amount of federal student aid, and accreditation status.” (RELATED: Lawmakers Weigh Investigation Into Jewish University Over $230 Million In State Funding)

“Secret shopping is another tool in FSA’s toolbox as we expand our oversight work to hold predatory schools accountable,” FSA Chief Operating Officer Richard Cordray said in the announcement. “Our focus—as always—is to ensure that students, borrowers, families, and taxpayers are not being preyed upon to make a quick buck.”

Colleges and universities that “treat current and prospective students fairly and act lawfully have nothing to fear from secret shopping,” according to Kristen Donoghue, FSA’s chief enforcement officer. Schools that mislead students are “on notice” that the department may be aware and “they should clean up accordingly.”

⚠️ Spot the signs of a student loan scam! ⚠️

💰 You’re asked to pay an upfront cost or monthly fees
🤨 You’re promised immediate loan forgiveness
🔑 You’re asked to provide your FSA ID password

👇 Here’s how to keep yourself safe 👇https://t.co/jZYzBsfd7R#TuesdayTips pic.twitter.com/UxpRSErBhY

— U.S. Department of Education (@usedgov) March 14, 2023

The announcement furthers the Biden administration’s commitment to going after colleges and universities that deceive students, but Career Education Colleges and Universities (CECU), the “national association representing the proprietary sector of higher education,” is worried that the secret shopper approach could be too partisan.

“We support reasonable practices that hold all institutions accountable for misrepresentations that financially harm students and taxpayers; however, the federal government has a track record of using secret shopper investigations to malign politically unfavored institutions with distorted findings that later result in the need for public correction,” Nicholas Kent, CECU’s chief policy officer, wrote in response to Tuesday’s announcement which was sent to the Daily Caller News Foundation. “Given the current administration’s animus toward for-profit institutions, we are concerned this self-proclaimed ‘tool’ will be used as a weapon to inflict further damage upon private career schools and limit student choice.”

Kent referenced a 2010 Government Accountability Office report which concluded that 15 for-profit colleges “deceptive or otherwise questionable statements to GAO’s undercover applicants,” according to the report. It was later revised after industry members and Republicans in Congress filed complaints that the report exaggerated exchanges between the colleges and the undercover students, Times Higher Education reported.

Lawmakers sent a letter, which cited the Daily Caller, to the GOA requesting several answers to questions about its “methodology in preparing and revising” the report, according to a copy obtained by the DCNF.

The agents’ findings will either be evidence in an ongoing investigation or be used to open a new one against a college or university, according to the DOE’s announcement. The FSA will refer the findings to law enforcement offices or departments at the state and federal levels if necessary.

The DOE referred the DCNF to the press release.

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