The Department of Education has failed to collect more than $1 billion in debt from nearly 1,300 colleges, most of which are for-profit, according to a report released Thursday by a nonprofit student advocacy group.
These institutions owe money to the department as of February, according to the National Student Legal Defense Network’s report, which cites documents obtained over the past two years through Freedom of Information Act requests.
The group claims the department has failed to apply the same aggressive methods typically used to collect money from student loan borrowers to collect debt owed by colleges and their owners.
“The department continues to spend a lot of time, energy and money on its collection systems from student borrowers,” Dan Zibel, the nonprofit’s chief counsel and one of the report’s authors, told CNBC. “Yet there is nothing happening to collect debt from institutions, owners and executives of for-profit colleges. That sort of disparity in the way the department treats them is grossly unequal.”
In a statement to CNBC, Department of Education press secretary Kelly Leon said the department is “committed to improving our policies and practices to better hold colleges accountable for their actions and to provide borrowers with fair and streamlined access to the benefits to which they are entitled.”