NAICU Washington Update

Enforcement Office Within Federal Student Aid Reestablished by Department of Education

October 15, 2021

The Office of Federal Student Aid (FSA) is reestablishing an Office of Enforcement to increase oversight of and enforcement actions against postsecondary institutions that participate in the federal student loan, grant, and work-study programs. The office will be led by Kristen Donoghue, and report directly to Richard Cordray, the FSA’s chief operating officer.  

First established under the Obama Administration in 2016, and later discontinued under the Trump Administration, the Office of Enforcement will proactively identify and address major problems across institutions that pose widespread risks to students and taxpayers. This office will work closely with the Partner Participation and Oversight Office on a risk-based approach to oversight and compliance. The Office of Enforcement will also work with other agencies and partner with groups such as the Department of Justice, Consumer Financial Protection Bureau (CFPB), Federal Trade Commission, and state attorneys general. The Office of Enforcement will be comprised of four existing divisions:

Administrative Actions and Appeals Services Group: This group fines, limits, suspends, terminates, and imposes emergency actions against postsecondary institutions that participate in the federal student aid programs. 

Borrower Defense Group: This group analyzes borrower defense to repayment claims and recommends appropriate dispositions. 

Investigations Group: This group evaluates indicators of potential misconduct or high-risk conduct by postsecondary institutions and third-party servicers, and investigates institutions' compliance with federal laws, regulations, and the terms of program participation. 

Resolution and Referral Management Group: This group tracks and resolves referrals, reports of suspicious activity, allegations, and complaints about institutions and individuals that participate in the federal student aid programs. 

Donoghue joined FSA as a senior advisor to the chief operating officer and previously served as the enforcement director of the CFPB, where she led a 140-person office responsible for enforcement of federal consumer financial laws covering a range of financial services companies including the largest banks in the country.

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