Department of Education to Initiate Customer Experience Plan

In a turn of events that resembles more of a corporate move than it does a government one, the US Department of Education is hiring a Chief Customer Experience Officer to monitor students' rights for its Federal Student Aid program.  In total, Education Secretary Arne Duncan will hire 60 new staff to bolster the Department's oversight of educational institutions with particular focus on for-profit colleges and universities.  As I've reported in several posts, the federal government is tightening its reins on for-profit schools, those that garner an income from student enrollment, and public perception is showing a marked reaction - stocks of for-profit educational organizations including Apollo Group (the company that runs the popular University of Phoenix) fell on Friday, by as much as five percent, in response to the Education Department's announcement.

But nothing happens in a vacuum.  For-profit institutions make money not only from tuition and financial aid, but they may also, according to government reports, use questionable marketing and recruitment practices.  Recruiters lie to entice potential students to enroll and even encourage them to provide misleading information, says the Government Accountability Office.  The Department of Education's new Chief Customer Experience Officer and his/her staff will have discretionary power to investigate such claims and to impose fines of up to $25,000 per violation.  For-profit schools may also face the suspension of their eligibility for financial aid dollars if repeat offenses occur.  This penalty has obvious affects not only on the stock-value of the for-profits but also on their students as well, most of whom rely on federal financial aid to pay tuition and fees.

Among the Education Department's other related initiatives is a push for the open sharing of information related to colleges and universities.  This is of significant importance when prospective students request data, for instance, on student loan repayment rates, the default loan percentages of particular institutions, and on the allegations and findings of fraud a school may face.  Such an open flow of information is vital to keep students engaged in their own learning process and to restore confidence in the educational system as a whole.  If for-profits are to respected as legitimate educational organizations, they must be frugal, forthright and honest when it comes to all matters of student well-being, from financial aid to recruitment practices.

Photo credit: Michael Oh