(GENERAL-23-11) Establishing Personal Liability Requirements for Financial Losses Related to the Title IV Programs
March 1, 2023
On March 23, 2022, the U.S. Department of Education (Department) published an Electronic Announcement notifying institutions of higher education (institutions) that, in certain circumstances, it would require additional signatures on an institution’s Program Participation Agreement (PPA) from individuals representing corporations or other legal entities that have, or could have, direct or indirect effects on the institution’s administrative capability or financial responsibility. The Department took this action to increase the accountability of corporations and other entities with substantial control over institutions.
To further strengthen accountability and better ensure that taxpayers are protected in the event of school closures, approved borrower defense claims, or outstanding liabilities owed to the Department, the Department is issuing this Electronic Announcement to clarify its process for considering when to require certain individuals who exercise substantial control over institutions to assume personal liability for financial losses which may be incurred by the federal government. This Electronic Announcement describes the process the Department will use when it considers imposing signature requirements for PPAs that will apply to individuals in their personal capacity, rather than corporations and other entities. This process will provide the Department with additional tools for ensuring compliance with the legal requirements of the Title IV programs and recouping funds to cover financial losses incurred by the federal government.
