Holding Executives Responsible
Katherine Knott
March 3, 2023
In Education Department’s latest move to ramp up oversight of for-profit colleges, it outlines its authority to hold individuals who control risky institutions financially responsible. The guidance also applies to private nonprofit colleges.
Individuals who own or run private colleges—for-profit and nonprofit—could be on the hook for the cost of unpaid debts owed to the Education Department if their institution fails to operate in a financially responsible way, according to new guidance from the Education Department.
Department officials said the guidance, which requires those who “exert significant control” over private institutions to assume personal liability, is aimed at the riskiest institutions as well as intended to protect students and taxpayers.
Associations representing nonprofit and for-profit private institutions said the guidance was an overreach, exceeding the department’s authority.
