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Education Department Won’t Hold For-Profit College Executives Personally Accountable

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Education Secretary Miguel Cardona speaks at an event where Vice President Kamala Harris announced the cancellation of federal student loans borrowed by students of Corinthian Colleges, June 2, 2022.

Earlier this month, the federal government canceled all loans made for students attending the defunct, predatory for-profit education chain Corinthian Colleges, at a cost of close to $6 billion. While restitution for fraud victims was welcomed, many were disappointed to see no accountability for the individuals responsible for perpetrating the fraud. This is a perennial lament in the field of white-collar crime, where accountability has been lacking for decades.

Indeed, the CEO of Corinthian, Jack Massimino, had to pay a grand total of $80,000 to settle a Securities and Exchange Commission case about the college; his chief financial officer had to pay just $20,000. That adds up to just a smidgen of the more than half a million loans Corinthian lured students into to pursue valueless diplomas. Massimino made millions of dollars while serving as Corinthian’s CEO.

Could the government force the controlling officers of for-profit colleges to be personally liable for the fraud they commit? A prominent borrowers’ group and some congressional leaders say yes, but they have met with resistance from […]

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