August 10, 2023
Earlier this summer, the Supreme Court ruled against the Department of Education’s unconstitutional plan to unilaterally forgive $430 billion worth of student loan debt. The clear rebuke apparently hasn’t fully sunken-in at the White House, as Education Secretary Cardona is pursuing new creative ways to circumvent the decision. Take, for example, the Biden administration’s new action against CollegeAmerica, a career college in Colorado.
On July 25th, the White House released a statement directing the cancellation of debt for 7,400 borrowers who attended CollegeAmerica between 2006 and 2020 – estimated to collectively total $130 million. The administration argues that every individual that attended CollegeAmerica was deceived, defrauded, and lied to; thus, justifying the directive to eliminate their debt.
Prior to this small-scale taxpayer-bailout, the federal government long sought to shutter CollegeAmerica. For years, DOE brought lawsuits against Center for Excellence in Higher Education – which operated career colleges like CollegeAmerica, Stevens-Henager College, and Independence University. In the midst of its lawsuits, DOE improperly withheld federal student aid from the CEHE’s colleges for allegations that were ultimately overturned, but in the end the DOE won by inflicting long-term damage that resulted in these schools closing their doors.
The unfortunate situation with CEHE is just one example of DOE’s crusade against career colleges. We are seeing a very similar situation now with Florida Career College (FCC), which is being sued by the DOE in order to close the school indefinitely. In April, DOE escalated the situation by withholding federal funding to the school before the legal process reached a conclusion. This decision could force the FCC to close its doors on students and employees.
We’re seeing the administration use the same playbook with FCC as it did with CollegeAmerica: file a lawsuit, tarnish the school’s reputation, and withhold funding. It’s yet to be seen whether FCC will follow in the footsteps of CollegeAmerica and close its doors. If it does, we are sure President Biden will gladly take credit for yet another taxpayer-funded student loan bailout.
Taxpayers, borrowers, and students deserve better than DOE’s ongoing targeting of career and private colleges. For their sake, let’s hope the government reverses course.
