This New Unit Is Cracking Down On Schools That Take Advantage Of Students

Students rejoice!

When Peter Zappe attended the for-profit Marinello Schools of Beauty, he says that he was being charged questionable fees and encountered odd business practices.

"I have tried to contact Marinello regarding these issues to an almost absurd degree to no avail," Zappe wrote to A Plus. "I have never gotten a receipt for any payments, [or been told] why I owe different cash balances depending on who I talk to, and also why I was sent to collections. These are just a small example of the issues that have gone unresolved."

It turns out that Zappe was not alone in his confusion with the financial practices at the Marinello Schools of Beauty.

Last week, the Department of Education ceased all financial aid to the Marinello Schools of Beauty after discovering the company under-rewarded student funds, charged absurd fees and forced low-income students to pay some fees out of pocket. The company has since closed all of their campuses.

To help prevent future cases of higher education fraud, the Department of Education announced the creation of the Student Aid Enforcement Unit.

"When Americans invest their time, money and effort to gain new skills, they have a right to expect they'll actually get an education that leads to a better life for them and their families," said Acting Secretary of Education John B. King Jr. in a press release. "When that doesn't happen we all pay the price. So let me be clear: schools looking to cheat students and taxpayers will be held accountable."

Consumer protections lawyer Robert Kaye will be named as the head of the new unit.  He will report directly to the office of Federal Student Aid (FSA). President Obama will ask Congress for $13.6 million to fund the unit in 2017, which will comprise about 50 full-time workers.

"It's simply imperative that students taking on significant financial obligations not be subject to enrollment abuses, that they get accurate information, and that their financial aid is properly allocated," said Ted Mitchell, the department's under secretary for higher education, to BuzzFeed News.

The Student Aid Enforcement Unit will be entirely focused on enforcing federal student aid laws. The Department of Education hopes to quickly identify higher education institutions that are engaging in fraudulent practices. The unit will also have the legal authority to administer suspensions or fines against institutions.

With the new Student Aid Enforcement Unit in place, the Department of Education hopes that incidents like those experienced at the Marinello Schools of Beauty will be investigated earlier so that more students can be protected from collegiate scams.

Cover image via Pool / Getty Images.