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.