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# Education Department Announces Use of Secret Shopping to Protect Students, Crack Down on Institutions that Lure Students with Lies    

# Education Department Announces Use of Secret Shopping to Protect Students, Crack Down on Institutions that Lure Students with Lies    

March 14, 2023

**Contact:  **press@ed.gov

                                    -        
The U.S. Department of  Education (Department) announced today that the Enforcement Office of  Federal Student Aid (FSA) will use secret shoppers as an additional tool to  monitor postsecondary institutions’ compliance with the laws and regulations  governing their participation in the federal student  aid programs. In particular, secret shoppers will evaluate recruitment, enrollment, financial  aid, and other practices of postsecondary institutions to help identify  potentially deceptive or predatory practices used to recruit and enroll  students.

“Secret shopping is another tool in FSA’s toolbox as  we expand our oversight work to hold predatory schools accountable,” said FSA Chief Operating Officer Richard Cordray. “Our focus—as always—is to ensure that  students, borrowers, families, and taxpayers are not being preyed upon to make  a quick buck.”

Specifically, secret shoppers will look for  misrepresentations regarding the transferability of credits, job placement  rates, completion and withdrawal rates, graduates’ future earning potential, career services, the cost of attendance, the amount of federal student aid, and  accreditation status, along with any other practices that may violate the laws  and regulations governing an institution’s participation in the federal student  aid programs.

Findings from secret shopping may  serve as evidence to support an ongoing investigation or review, or provide a basis for opening a new investigation or review. Where appropriate and permitted, FSA will refer findings from its secret  shopping efforts to other Department offices, including the Office of Inspector  General, and share findings with other law enforcement partners at the state  and federal levels.

“Schools that engage in fraud or misconduct are on  notice that we may be listening, and they should clean up accordingly,” said  Kristen Donoghue, FSA’s chief enforcement officer. “But schools that treat  current and prospective students fairly and act lawfully have nothing to fear  from secret shopping.”

**Improving Student  Outcomes by Bolstering School Oversight**

This work represents some  of the latest progress on the Biden-Harris Administration’s ongoing **commitment** to improving student outcomes, including by holding low-performing and  predatory schools accountable for swindling students out of time and money and  leaving taxpayers holding the bill.

In October 2021, the  Department reinvigorated school oversight and accountability efforts within FSA  by**reestablishing an  Enforcement Office** and hiring a chief enforcement officer,  who reports directly to FSA’s chief operating officer. That has already paid  dividends. For example, in fiscal year 2022, FSA:
- Initiated dozens of actions, including denying 10 school recertifications; revoking six Provisional Program Participation Agreements, which enable schools to participate in the Title IV program; and issuing two terminations, five suspensions, seven debarments, and eighteen fines totaling $2.5 million;
- Opened new investigations into fraud and deceptive practices at multiple schools and completed related site visits;
- Strengthened its relationships  with state and federal partners, including the Federal Trade Commission, Consumer Financial Protection Bureau, Department of Veterans Affairs, and state attorneys general, to identify and take action against schools that do not put their students’ interests first; 
- Released  guidance  outlining how it will implement long-standing provisions in the Higher Education Act that grant the Secretary authority to require leaders of private colleges that fail to operate in a financially responsible way to assume personal liability for the cost of unpaid debts owed to the Department of  Education; and
- Approved group discharges based on borrower defense findings, providing approximately $11.4 billion in relief to 875,000 students who attended       Corinthian Colleges, Inc., ITT Tech, Marinello Schools of Beauty, and Westwood College.

In addition to today’s  secret shopper bulletin, FSA issued two other enforcement bulletins to bolster  school compliance and better communicate with outside stakeholders. The **first bulletin** warned schools that the Department will act aggressively when it finds  misrepresentations made to servicemembers and veterans by schools. FSA’s chief  enforcement officer also wrote about the Department’s commitment to **protecting  military-connected students**. The **second bulletin** announced a new avenue for knowledgeable sources to submit tips about potential  violations of the laws and regulations governing the federal student aid  programs. 

FSA conducts oversight to protect students who  receive federal student loans, grants, and work-study funds to attend  postsecondary schools. FSA’s oversight also ensures the quality of educational  programs and safeguards the interests of taxpayers through audits, investigations,  and program reviews, among other oversight actions.
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