AG Grewal Tells Betsy DeVos: Don't Shield For-Profit Schools from State Law Enforcement Investigations – New Jersey and Washington State Lead 20 State Attorneys General in Demanding Accountability

TRENTON – Attorneys General Gurbir S. Grewal of New Jersey and Bob Ferguson of Washington State today led a coalition of twenty Attorneys General in calling on the U.S. Department of Education to honor its “historic law enforcement partnerships” by reinstating the long-standing practice of disclosing student loan information to law enforcement agencies – a practice it curtailed without explanation last month.

In a letter sent today to Secretary of Education Betsy DeVos, Attorney General Grewal and twenty other Attorneys General note that the Department of Education in June “quietly” revised its policy on disclosing student loan information to law enforcement agencies, reversing a practice that has existed for the better part of two decades.

“Once again, I’m disappointed by Secretary DeVos and the Department of Education,” said Attorney General Grewal. “We want to work with them. We want a meaningful partnership. Together, we can crack down on those who exploit students for profit. But the federal government’s latest action shields student-loan profiteers from real accountability. I remain hopeful that Secretary DeVos reverses her decision and restores our access to this information. We need to work together in order to build meaningful civil and criminal investigations against bad actors.”

Labeling the move a “mistake,” the letter contends that limited access to student loan information by law enforcement may hinder the ability of state Attorneys General and other agencies to protect students from predatory lending practices and fraud.

“No good reason exists for this abrupt policy change, which can only leave student loan borrowers worse off,” the letter asserts.

Since at least 2000, the federal government has permitted routine disclosure of student loan information to state Attorneys General and other authorities responsible for investigating and prosecuting crimes and civil fraud. The Education Department expanded law enforcement’s access to relevant student loan information in 2016, facilitating disclosures unrelated to possible violations of criminal laws and civil fraud.

“The Department’s policy change seems to send a signal: law enforcement agencies working to combat crime, fraud, and other unlawful conduct can no longer count on the Department as a reliable partner,” the letter from the Attorneys General states.

“We hope the Department does not actually intend to impede law enforcement agencies’ access to student loan information relevant to matters within their jurisdiction,” the letter says. “But we are concerned that may be the result of the Department’s policy change.”

Today’s letter reminds Secretary DeVos of the important role that state Attorneys General have played in protecting student loan borrowers from fraud and other unlawful conduct. Collaboration with the Education Department historically has facilitated these efforts by state Attorneys General to protect student loan borrowers.

For example, New Jersey and 46 other Attorneys General collaborated previously with the Education Department to secure debt relief for students who’d enrolled in programs run by Corinthian Colleges, Inc., which was found to have engaged in widespread fraud by misrepresenting job placement rates to enrolled and prospective students, and to have engaged in other deceptive, misleading and predatory tactics. (Approximately 2,200 New Jersey residents were determined eligible to apply for federal student loan debt cancellation as a result of the Corinthian investigation.)

In the case of Corinthian, the letter recalls, Attorneys General from across the U.S. pooled their resources through the National Association of Attorneys General (NAAG) and “used information provided by the Department to notify students of their eligibility for loan forgiveness.”

“Unfortunately,” the letter observes, “the Department has stopped sharing the information that State Attorneys General have used in these efforts without providing any rationale for its decision. And now, with the formal elimination of its policy on routine disclosures of information for use by law enforcement agencies, the Department risks further hampering the ability of State Attorneys General and other law enforcement officials to protect students from predatory practices and to secure relief for students victimized by fraud and other unlawful activities.”

In May 2018, Attorney General Grewal wrote to Secretary DeVos, asking that the Education Department share records from its investigations of fraudulent activities by educational institutions. Secretary DeVos has not responded to that letter.

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