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Ed. Dept. says college chain took advantage of students, cuts off student loan access

The U.S. Education Department, under Education Secretary Miguel Cardona, has moved to deny student loan access to Florida Career College.
Mandel Ngan
The U.S. Education Department, under Education Secretary Miguel Cardona, has moved to deny student loan access to Florida Career College.

A private, for-profit college chain with a dozen campuses across Florida and Texas will lose access to federal student aid. The move comes after an investigation by the U.S. Department of Education's office of Federal Student Aid (FSA) found the chain, Florida Career College, violated federal rules and failed to meet basic standards required to access federal loans and grants.

"Federal Student Aid is holding Florida Career College (FCC) accountable for taking advantage of some of the most vulnerable students," FSA Chief Operating Officer Richard Cordray said in a statement.

Unless a court intervenes, the move leaves FCC, which enrolled roughly 5,000 students late last year, facing an uncertain financial future. The overwhelming majority of its students depend on federal aid to attend. According to the College Scorecard, 97% of students at FCC's Tampa campus, for example, received federal loans; 97% also received a federal Pell grant for being low-income.

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FCC pushed back against the department's conclusions in a statement to NPR.

"We are deeply disappointed in the Department of Education's myopic and misguided decision," wrote Joe Cockrell, FCC spokesperson. "The DOE risks harming thousands of students seeking economic stability and a better life. For more than 40 years, our singular focus has been quality career training programs that meet or exceed all state and Federal regulations so that people can find a good job in their chosen career path. We intend to fight this unjust and inequitable decision vigorously on behalf of our students and the communities we serve."

The government's case

FCC's business model is built on offering short-term certificate programs in fields such as HVAC, automotive technician, and dental assistant – often to students who did not finish high school. And this appears to be where FCC ran afoul of federal guidelines.

In order for a student to receive federal student aid to help pay for a postsecondary certificate program without first graduating high school, they have to take a test, known as an ATB ("Ability-To-Benefit") Test. That test seeks "to determine whether a student who does not have a high school diploma can benefit from postsecondary education," according to the department's release. "Among other things, this protects students from ending up with debt they cannot afford."

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According to the Education Department, since 2018, nearly half of FCC's students have had to take the ATB test before qualifying for federal aid. But this testing process, according to the department, was often a sham.

Federal investigators found that test administrators "routinely" broke the rules to help students pass, "including by filling in or changing answers after students finished their tests, helping students during testing or taking tests for them, and permitting students to use calculators in violation of testing rules."

The department's office of Federal Student Aid also found evidence that "FCC employees and employees of its parent company, International Education Corporation (IEC), knew about and encouraged violations of the ATB testing process to affect test outcomes."

As a result of these efforts, helping students pass the test who likely would have failed otherwise, the department found, "FCC and another school owned by IEC accounted for nearly 75% of all ATB enrollments nationwide during the 2021-22 award year."

In a statement, FCC insists it "consistently meets and exceeds the requirements set by accreditors and state and federal regulators" and that it "is routinely commended by accreditors for its exceptional student services offerings including career services, job placement, volunteer opportunities, and access to additional community and government resources."

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The Education Department found that making it easier for students without a high school diploma to receive federal aid and attend FCC eventually hurt many of them. Between 2016 and 2021, more than half the students who entered FCC via this special test ended up dropping out, many of them with student debts.

According to the College Scorecard, the average annual cost for the largest program on FCC's Tampa campus is more than $35,000; the midpoint for all certificate schools is less than half that, roughly $16,000.

Research has shown that those hit hardest by student debt are those who take on loans but do not finish with a degree or certificate.

What borrowers should know

The Education Department says, if FCC quickly agrees to meet several stop-gap standards, students currently enrolled in short-term programs will be allowed to keep their federal aid through Sept. 30 and potentially complete their certificates. If the chain does not agree to meet these standards, access to federal student aid will be cut off by the end of April.

Students and former students with federal loan debt may qualify for what's known as a "false certification discharge" of their loans, if they believe they benefited from misconduct around administration of the ATB test, including if they were allowed to use a cell phone to answer questions or if the test proctor in any way provided assistance during the test itself. The office of Federal Student Aid has provided an FAQ for students here.

The department's findings come on top of allegations made in a federal class action lawsuit filed against FCC three years ago. In that suit, plaintiffs argued the school was targeting economically vulnerable people of color, making false promises of career training and job placement while pushing students into loans they could not repay. At the time, FCC called the suit "baseless legally and factually." Last month, in a process known as individual arbitration, an arbitrator issued an award to Florida Career College, according to Cockrell, the FCC spokesperson. The specific details of the award are confidential.

Cutting off a school's access to federal student aid is a dramatic move from the Education Department and relatively unusual. According to federal data, FCC is the first school in 2023 to have its request for continued access to federal student aid denied. Four schools had their access denied in 2022.

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Cory Turner
Cory Turner reports and edits for the NPR Ed team. He's helped lead several of the team's signature reporting projects, including "The Truth About America's Graduation Rate" (2015), the groundbreaking "School Money" series (2016), "Raising Kings: A Year Of Love And Struggle At Ron Brown College Prep" (2017), and the NPR Life Kit parenting podcast with Sesame Workshop (2019). His year-long investigation with NPR's Chris Arnold, "The Trouble With TEACH Grants" (2018), led the U.S. Department of Education to change the rules of a troubled federal grant program that had unfairly hurt thousands of teachers.