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# U.S. Department of Education Takes Action on Student Aid Violations and School Closure

# U.S. Department of Education Takes Action on Student Aid Violations and School Closure

August 10, 2021

**Contact:  **press@ed.gov

                                    -        
Today, the U.S. Department of Education's office of  Federal Student Aid (FSA) issued Final Program Review Determinations to two  schools: RWM Fiber Optics, Inc. and Harrison College. In each instance, FSA  identified more than $2.5 million in liabilities, resulting from multiple  violations by RWM and from the closing of Harrison, respectively.

“All institutions are expected to serve the best  interests of their students, not serve themselves,” said FSA Chief Operating  Officer Richard Cordray. “Schools that engage in bad behavior or that suddenly  close their doors, leaving students out in the cold, will be held accountable, and  we expect other schools to pay attention to the actions we are taking today.”

**RWM  Fiber Optics, Inc. (RWM)**

In September 2018, FSA conducted a routine program review  at RWM to evaluate the school’s compliance with the federal statutes and  regulations that govern the student aid programs. During the review, FSA  examined RWM’s processes and identified 16 specific violations, including  numerous instances where school officials falsified information or improperly  retained credit balances that were actually owed to the students. FSA  determined that these violations were “egregious” efforts to illegally obtain  federal student aid funds.

In particular, FSA found that the school falsified FAFSA  information to make it appear students were eligible to receive financial aid  to which they were not entitled. RWM listed nonexistent dependents to inflate  student aid awards, and it fictionalized high school diplomas or GED  credentials that some students did not earn. RWM also improperly created  student aid account usernames and passwords without students’ knowledge or  consent, and the school submitted FAFSA information without allowing students  to review or certify its accuracy.

Among other violations, FSA determined that RWM  improperly paid students with Federal Work-Study Program funds to clean  bathrooms, pick up garbage, and clean the building, even though these tasks did  not help students develop in their professions as the program requires.  Further, RWM failed to pay students credit balance refunds on a timely basis or  in lump sums as required by law. Some students did not receive their credit  balance funds until they graduated.

FSA found that RWM owes the Department more than $2.4  million in liabilities, which cover all *Title  IV* program funds disbursed for the 2015–16, 2016–17, and 2017–18  award years. RWM’s participation in federal student aid programs ended in  December 2018, and the school closed.

**Harrison  College (Harrison)**

In September 2018, Harrison announced its immediate  closure of 11 campuses in Indiana and Ohio affecting approximately 2,100  students. The institution cited declining enrollment and financial concerns as  factors for its sudden closure. Harrison’s financial composite score deteriorated rapidly  between its fiscal years ending June 30, 2017 and June 30, 2018.

Student loan borrowers enrolled at Harrison when it  closed (or who withdrew within 120 days before it closed) and unable to  complete their program of study because of the closure, may apply for a  discharge of their federal student loans. Parents who borrowed a PLUS loan for  a student enrolled at Harrison may also apply for a discharge.

When Harrison closed, FSA conducted outreach to help  students understand their options. Today, FSA finds that Harrison is liable for  more than $3.6 million that taxpayers paid to discharge William D. Ford Federal  Direct Loan Program loans on behalf of borrowers who applied for and received  closed school loan discharges. That amount is in addition to more than $2.9  million in closed school discharges that FSA previously assessed to Harrison  following a final audit.

Today’s actions underscore the Department’s  commitment to protecting students and taxpayers from poor-performing programs.  Last week, the Department announced its intent to form a negotiated  rulemaking committee to address issues affecting student loan borrowers,  including borrower defense to repayment for students harmed by their colleges’  misleading practices, loan repayment, and improving the rules governing  targeted student loan cancellation, including closed school discharge.
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