The U.S. Department of Education has taken steps to ensure that companies that owned institutions are held accountable for any debt owed to the government. This includes any liabilities that came from closed school loan discharges and borrower defense repayment.
“If a company owns, controls, or profits from a collage, it should also be on the hook if the institution fails students,” said James Kvall, Under Secretary of Education. “Today’s steps will ensure taxpayers aren’t held liable for colleges that fail their students or close their doors, especially without the opportunity for students to finish their courses of study.”
If an organization owned at least 50% interest in a private college, it will be required to sign an agreement with other school leaders called the Program Participation Agreement. This will ensure these entities are held responsible for the loss to the taxpayer should the institution close.