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Financial Services Law Insights and Observations

Education Dept. creates enforcement office

Federal Issues Department of Education Student Lending Enforcement FTC

Federal Issues

On October 8, the Department of Education announced the creation of the Office of Enforcement within Federal Student Aid (FSA), which is designed to strengthen oversight of and enforcement against postsecondary schools that participate in the federal student loan, grant, and work-study programs. According to the announcement, the Department named Kristen Donoghue, the former CFPB enforcement director, as the chief enforcement officer. Among other things, the office will work with the Partner Participation and Oversight Office on a risk-based approach to oversight and compliance and will be comprised of the following four existing divisions: (i) Administrative Actions and Appeals Services Group; (ii) Borrower Defense Group; (iii) Investigations Group; and (iv) Resolution and Referral Management Group. The announcement also notes that FSA will coordinate with other state and federal partners as part of FSA’s increased enforcement efforts. Specifically, FSA plans to coordinate “with the Federal Trade Commission, which earlier this week announced a major shift in its enforcement priorities to focus on postsecondary schools that illegally engage in unfair and deceptive acts or practices.” (Covered by InfoBytes here.)

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