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Education Dept. cuts off student aid to 26 for-profit colleges

By Amy R. Connolly
Education Dept. cuts off student aid to 26 for-profit colleges
The U.S. Department of Education cut off access to federal financial aid at 26 for-profit education programs in three states. The department said 23 Marinello Schools of Beauty campuses in Nevada and California and three Computer Systems Institute campuses in Illinois violated rules governing the disbursement of student aid. Photo by zimmytws/Shutterstock

WASHINGTON, Feb. 4 (UPI) -- The U.S. Department of Education cut off access to federal financial aid at 26 for-profit education programs in three states after allegedly uncovering violations that included requesting federal aid for students based on invalid high-school diplomas.

The department said 23 Marinello Schools of Beauty campuses in Nevada and California and three Computer Systems Institute campuses in Illinois violated rules governing the disbursement of student aid. The department said Marinello under awarded Title IV grants and loans and engaged "in other acts of misrepresentation." Investigators found CSI falsified job placement rates, the department said.

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The move comes as the Education Department steps up enforcement and oversight on for-profit higher learning institutions in an effort to tamp down staggering student loan debt and increase accountability and transparency in higher education.

"Our students depend on higher education institutions to prepare them for careers through a quality education. Unfortunately, some schools violate their trust through deceptive marketing practices and defraud taxpayers by giving out student aid inappropriately. These unscrupulous institutions use questionable business practices or outright lie to both students and the federal government," Under Secretary Ted Mitchell said. "In these cases we are taking aggressive action to protect students and taxpayers from further harm by these institutions."

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Joe Hixson, a representative of the Marinello Schools, said the findings are "unfounded allegations" and chided the department for delaying student-aid funding for months before it specified the alleged problems.

"While we intend to appeal this decision and while Marinello believes it has done nothing wrong and will defend itself vigorously," he said, "without the federal funds our students deserve, our operations are at risk."

The entire Marinello school chain, 56 campuses in total nationwide, received more than $87 million in Pell Grants and federal loans for the 2014-15 award year. CSI campuses received approximately $20 million in federal funding for the same period.

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The Marinello schools have until Feb. 16 and CSI has until Feb. 12 to submit evidence to dispute the department's findings.

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