Press Release
☷Federal Student Aid Reaches Settlement Agreement with International Education Corporation for Student Aid Eligibility Violations
U.S. Department of Education ( By Press Release office)
Feb 09,2024
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The U . S . Department of Education announced today that it reached a settlement agreement with for - profit school owner International Education Corporation ( IEC ) and its subsidiaries – Florida Career College ( FCC ) and United Education Institute ( UEI ) , also known as UEI College ( UEIC ) – regarding violations of the ability - to - benefit ( ATB ) test regulations . These regulations determine eligibility for federal student aid for students who don ' t have a high school diploma or GED equivalent . In 2023 , an investigation by the Department found that FCC consistently broke the rules for administering ATB tests . The Department discovered that FCC and senior leaders of IEC pressured proctors to pass students and manipulated test outcomes to increase enrollment of students receiving federal aid . They also found that FCC test proctors and employees filled in or changed answers , provided assistance during testing , allowed calculator use against the rules , and recruited students regardless of their ability to benefit from the program . Over half of the FCC students enrolled through ATB tests dropped out without a degree but with significant student loan debt . The settlement announced today follows a similar investigation into ATB violations at UEI/UEIC . The settlement agreement: Confirms the Department ' s termination of FCC ' s participation in federal student aid programs and ends any further appeals by the school . Imposes strict conditions on UEI/UEIC ' s continued participation in federal student aid programs for three years , including the prohibition of relying on ATB exams to qualify students for enrollment with federal aid and the requirement to preserve marketing and recruiting materials for Departmental oversight . Requires the separation of IEC ' s CEO and CFO , who were responsible for the widespread misconduct , as a condition for UEI ' s continued participation in federal student aid programs . Mandates that IEC provide the Department with a letter of credit worth more than $6 million , which can be used to cover any liabilities or loan discharges related to the misconduct . As part of this resolution , the Department ' s office of Federal Student Aid ( FSA ) agreed that any future administrative actions regarding this conduct will only seek recovery for loan discharges and other liabilities paid from the $6 million letter of credit . "This strong agreement with International Education Corporation demonstrates FSA ' s commitment to holding schools and individuals accountable for complying with the administration of federal student aid programs , " said Richard Cordray , FSA chief operating officer . laws and regulations . " "Our Office of Enforcement will continue to investigate reports of school and individual misconduct to protect the integrity of our programs . " The full settlement agreement announced today is available in the Department of Education ' s FOIA Reading Room . ATB Violation The purpose of the ATB test is to provide students without a high school diploma or GED equivalent a path to federal financial aid by passing a test designed to demonstrate that they can benefit from higher education . Applicants who fail to demonstrate their ability to benefit when tested are more likely to fail or drop out of their academic programs and take on student loan debt that they may not be able to repay . Ensuring schools do not unduly influence test administration To increase enrollment and ensure students are not saddled with unpayable debt , regulations require that ATB tests must be administered independently of the school a student wants to attend . Violations of the rules and regulations of the ATB testing process can seriously harm the affected students and the integrity of the federal student aid program . FCC officials’ interference in the administration of the ATB exam harmed students and the Title IV program . Between the 2016 award year and 2021 , 53% to 57% of FCC ATB students dropped out of the program each year without earning a certificate . However , students who drop out and are unable to obtain a certificate will face the financial burden of enrolling . Between 81 and 88 percent of ATB students who dropped out of FCC in the four years before the department took action remained in debt or exhausted their federal Pell Grant eligibility — often both . As a result , these applicants are deprived of future opportunities for financial aid and are arguably worse off than they would have been if they had never attended school . Protecting Students In addition to holding IEC , FCC , and UEI/UEIC officials accountable , FSA provides support to students as FCC withdraws from federal student aid programs . Specifically , FSA works with FCC’s accrediting agency and state higher education officials to help students understand their options for enrolling at other schools . The FSA also provides students with information on how to seek applicable loan forgiveness , such as the False Certification Waiver if a student mistakenly enrolled via an ATB test and the Borrower Defense Waiver if the FCC misled the student or engaged in other misconduct . In 2023 , the Department cracked down on FCC and said they couldn ' t accept new students anymore . But they did let them keep giving out federal student aid until Jan . 31 , 2024 , so the current students could finish their studies at FCC if they wanted to . On Jan . 30 , 2024 , FCC officials told the Department that the school will shut down on Feb . 15 , 2024 . Since the Department already said no new students could enroll starting in April 2023 , there won ' t be any students getting federal student aid left at FCC when it closes . This week , the Department will update info for former FCC students at StudentAid . gov/announcements - events/florida - career - college . This move shows that the Department is serious about making sure higher education laws and rules are followed and that students , taxpayers , and the federal student aid programs are protected .
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