UPDATED: This 'tipster' got in touch with one of the scambloggers a few months ago, claiming the same thing about Thomas M. Cooley Law School. So it might be a hoax.
Is it true? Where are the documents to back up this claim?
A little bird wrote to me today and said:
Thomas M. Cooley Law School in Michigan is under investigation for serious Title IV violations and helping student loan companies bilk students, taxpayers, and the government out of billions of dollars.
According to a person involved in the multi-agency investigation who spoke on the condition of anonymity, the probe is part of the Dept of Ed's for profit crackdown and the feds crackdown on the 9.5 percent student loan scheme that's causing graduates student loan debt to double and triple to astronomical rates. Cooley has been secretly operating their state’s student secondary market program and helping lenders grow their 9.5 percent loan portfolios. Investigators discovered that the school has been purchasing the college loans of their incoming students then using their students' personal information to execute federal consolidation loans for the loans they purchased and the federal loans the students' take out to pay Cooley’s tuition. Cooley, then changes those students' graduation date to match the maturity date on the fraudulent consolidation loan. The fraudulent loans are packaged as 9.5 percent eligible student loan revenue bonds and sold as Student Loan Auction Rate Securities. Once the SLARS are sold, swapped, or traded on the muni bond market, those students’ whose loans were sold etc are either ‘dismissed’ for academic reasons, 'honor code violations' or diagnosed with a ‘learning disability.'
Investigators also discovered that a good portion of Cooley's 'Administrators' and 'Executive Officers' are really employees/officers at banks, investment firms, private equity firms and securities dealers [my emphasis].
I've been searching for about an hour or more for news pieces on this investigation. So far, nothing is showing up. Stay tuned.
13 comments:
Scary! I always wondered if the companies who handle my student loan screwed me in some way and cover it up. So it's not about students being ignorant, it's about students getting screwed and then blamed.
Does anyone remember the Gong Show?
Also, the time when Carol Burnett appeared on the Gong Show?
I won't give away the ending.
I think this got leaked to Shilling Me Softly some months ago. I don't recall ever hearing it go anywhere. Think it might be a fraud.
@Anonymous 5:43 PM - thanks. I am exploring it, and have reached out to the Dept. of Ed. to see if it's true. There is absolutely nothing out there about it.
Absolutely and totally despicable.
I'm no genius with google cache, but it looks like a story in www.cleveland.com, for the Cleveland Plain Dealer, that was later removed, but not before being quoted in a Huffington Post comment from CH Burns. Not sure that Cleveland was the original source, though.
Maybe someone with better tech skills could find more?
Send an FOIA letter to the Dept. of Ed.
WOH. I believe it, sad as that is, but that is a new low.
You might want to consult a lawyer about defamation laws before you go publishing possibly defamatory material about and institution that presumably has a lot of unemployed lawyers in it's rolodex.
@Anonymous 12:35
Uh, I realize there are a lot of angry unemployed lawyers in ITS rolodex. But that's not the point, and this person doesn't sound like an angry grad. They sound like someone that might be an insider at the Dept. of Ed (that's my hunch). But who knows?
I didn't suggest that it was true. Did you miss the questions at the beginning of the post - you must have. Let me restate them for you:
a) Is it true?
b) Where are the documents to back up this claim?
Obviously, I am asking if what they said can be verified, and that is fair. Why not share that with my readers? I didn't proclaim the assertion to be true - THAT would be careless, and I stick to verified sources and my own research (you obviously don't spend time here, and are not aware of the publications I have elsewhere in highly reputable journals and so forth).
I have reached out to a number of editors and reporters about this 'tip.' I do not have the resources, like the CHE, IHE, etc., etc. to investigate the veracity of such a claim. So, I alerted them to a possible story. How is that defamation? I'm not denouncing the institution and declaring the comment to be true. Moreover, I have gotten in touch with my contacts at the Dept. of Ed and asked them about the investigation. If it's bogus, I'll say so. I have only raised questions about a message sent to me. I received one like this many, many months ago, and it was absolutely credible, and the whistle blower eventually let me use his name: http://alleducationmatters.blogspot.com/2010/11/sordid-relationships-and-broken_23.html
As someone suggested, an FOIA letter is in the making, too.
Interesting. I wouldn't surprise me. If it is true, I suppose it puts the entire system into question.
@Anonymous 12:29 PM - I think we should question the entire system. For instance, there was egregious abuse of the system in Kentucky (something I've written about) - http://alleducationmatters.blogspot.com/2010/01/betrayal-in-kentucky-in-north-carolina.html. I also wrote about a woman in PA who was misled. As soon as she stepped foot on campus, the financial aid office did not give her DIRECT LOANS. She should have received direct loans FIRST. I even wrote to the PA Dept. of Ed, requesting that they investigate this school - Robert Morris University. They refused to open an investigation. I fear she was not the only student misled in this way, but nobody wants to bother with it. There are so many examples across the country like this . . .
@Liz - I saw something similar. It wasn't the source you mentioned, but another reliable one. But when I clicked on the link, the story - by Alex Warne - was entirely different.
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