It wasn’t too long ago that the Consumer Financial Protection Bureau (CFPB) was empowered by Congress to take on colleges and student loan servicers like veritable financial superheroes. And they’re not resting on their laurels – they’re rapidly evolving into the tough cops on the student loan block, most recently by filing a lawsuit against private for-profit college franchise ITT Tech accusing them of predatory lending. That is the reason that the government decided to create a student aid enforcement unit.
If you’ve got a TV, no doubt you’ve seen their ads. They promising to change your life by giving you a world-class education and incredible job opportunities. Even if this was the typical outcome, the costs to attend are prohibitive. Bachelor’s degrees from ITT can cost $88,000 and Associate’s an incredible $44,000. Pricing your educational programs this high is objectionable, but not legally actionable. But it’s how ITT urged students to finance these astronomical tuition rates that are the subject of the lawsuit.
Acting Secretary of Education John B. King Jr. stated, “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 themselves and their families. Schools looking to cheat students and taxpayers will be held accountable.”
With approximately 50 people to start. The new unit will be led by former Federal Trade Commission enforcement attorney, Robert Kaye. Staff will move from other existing department offices, and new personnel will be added. The reorganization will be funded through existing resources for now.