The Education Department helped 21 U.S. colleges avoid sanctions in the last two years, by adjusting their student loan default rates, according to a report Saturday.
The department can bar student access to federal loans and grants at colleges if those college students’ default rates go over 30 percent for three consecutive years, or 40 percent in one single year. By adjusting the default rate, federal officials give colleges a reprieve that preserves their ability to offer federal student aid they need to avoid closing, according to the Wall Street Journal report.
An Education spokeswoman told the Journal that adjusting default rates is “part of the department’s deliberative process,” but did not elaborate on why certain schools were on the list.
The 21 colleges featured include 10 for-profit colleges, six historically black colleges and five community colleges.
Schools can get their default rates adjusted through an appeals process to the department. But In 2014 and 2015, the department adjusted default rates for schools voluntarily, without the schools appealing for help.
Among the schools that avoided sanction was the now-closed American Commercial College in San Angelo, Texas. That college’s president, Doyle Brent Sheets, pleaded guilty in 2014 to defrauding the Department of Education student-aid funds. Sheets was sentenced to two years of prison time.
