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# Federal Student Aid Reaches Settlement Agreement with International Education Corporation for Student Aid Eligibility Violations

# Federal Student Aid Reaches Settlement Agreement with International Education Corporation for Student Aid Eligibility Violations

February 8, 2024

**Contact:  **press@ed.gov

                                    -        
The U.S. Department of Education today announced a settlement agreement with for-profit  school owner International Education Corporation (IEC) and its subsidiaries –  Florida Career College (FCC) and United Education Institute (UEI), which also  uses the brand name, UEI College (UEIC) – related to violations of the  ability-to-benefit (ATB) test regulations. 

These regulations  govern eligibility to receive federal student aid for students who do not have a high school diploma or GED equivalent. 

In 2023, a  Department **investigation  found** that FCC routinely broke the rules  governing how schools can administer ATB tests. The Department found that,  among other wrongdoing, FCC, and senior leaders of IEC pressured proctors to  pass students and inappropriately influenced test outcomes to boost enrollment  of students who receive federal aid to attend IEC schools. 

The  Department also found that FCC test proctors and employees filled in or changed  answers after students finished their tests, helped students during testing or  took tests for them, and allowed students to use calculators in violation of  testing rules. 

This  misconduct aimed to maximize enrollment and school profits, by recruiting and  enrolling students regardless of their ability to benefit from the program.  More than half of the FCC students enrolled through ATB tests withdrew from the  program with no degree, but significant student loan debt. 

The settlement  announced today comes after an investigation into UEI/UEIC for ATB violations  similar to those the Department found at FCC. 

Specifically, the settlement agreement:
- Finalizes the Department’s  **termination of FCC’s participation**  in the federal student aid programs and ends any further appeals by the school. 
- Limits UEI/UEIC’s continued participation in the federal student aid programs by imposing strict conditions for three years that, among other things, prohibit the school from relying on ATB exams to qualify students for enrollment with federal student aid funds, and require preservation of marketing and recruiting materials for continued       Departmental oversight. 
- Requires, as a condition of UEI’s continued participation in the federal student aid programs, the separation of IEC’s chief executive officer and chief financial officer, who led the company during the widespread wrongdoing. And, 
- Requires that IEC provide the Department a letter of credit of more than $6 million, which the Department can use to pay for any liabilities or loan discharges related to the misconduct at issue. 

As part of this resolution, the Department’s office of Federal Student Aid (FSA) agreed that  future administrative actions based on this conduct will be limited to recovery  for loan discharges and other liabilities paid to the $6 million letter of  credit. 

“This strong agreement with International Education Corporation demonstrates Federal Student Aid’s commitment to holding schools and  individuals accountable for abiding by the laws and regulations that govern the federal student aid programs,” said FSA Chief Operating Officer Richard  Cordray. “Our Enforcement Office will continue to investigate reports of  wrongdoing by schools and individuals to protect the integrity of our programs.” 

The full settlement agreement announced today is available on the Department’s **FOIA  Reading Room**.

**Violations of the ATB regulations**

The purpose of ATB tests is to provide a path for students who do not have a high school diploma or GED equivalent to access  federal financial aid by passing a test designed to demonstrate that they can  benefit from postsecondary 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 to incur student loan debts that they may not be able to  afford to repay.To ensure that schools do not improperly influence test administration  to boost enrollment and that students do not end up with debt they cannot  repay, the regulations require that ATB tests must be administered  independently from the school the student seeks to attend. Violations  of the rules and regulations governing the ATB testing process significantly  harm impacted students and the integrity of thefederal student aid  programs.  

FCC officials’ interference in ATB test administration harmed students and the *Title IV* programs. From Award Year 2016 to 2021, between 53% and 57% of FCC’s ATB students  withdrew from their programs each year without obtaining a certificate. 

  Nevertheless, the students  who withdrew and could not obtain a credential face financial burdens for  having enrolled. During the four years preceding the Department’s action,  between 81% and 88% of the ATB students who withdrew from FCC still incurred  debt or exhausted their Federal Pell Grant eligibility—usually both. 

  As a result, these applicants have been denied future  opportunities to receive financial assistance and are, arguably, worse off than if they had never attended the school.

**Protecting students**

In addition to holding  officials from IEC, FCC, and UEI/UEIC accountable, FSA has supported students  as FCC exits the federal student aid programs. Specifically, FSA worked with  FCC’s accrediting agency and state higher education officials to help students  understand their options to enroll at other schools. FSA also provided students  information about how to seek an applicable loan discharge, such as a false  certification discharge if the students wrongfully were enrolled through ATB  testing or a borrower defense discharge if FCC misled students or engaged in  other misconduct. 

In its enforcement actions  against FCC in 2023, the Department prohibited the school from enrolling new  students, but permitted it to continue offering federal student aid until Jan.  31, 2024, to allow time for then-enrolled students to complete their program of  study at FCC if they wanted to.

On Jan. 30, 2024, FCC  officials informed the Department the school will close on Feb. 15, 2024. Because the Department prohibited new enrollments beginning in April 2023, no  remaining students receiving federal student aid will be attending FCC by the  date of closure. This week, the Department will update information for former  FCC students at **StudentAid.gov/announcements-events/florida-career-college**. 

Today’s action demonstrates the Department’s ongoing commitment to enforcing higher education laws and regulations and protecting students, taxpayers, and the integrity of the federal student aid programs. 

****
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