U.S. Department of Education Takes Enforcement Against Two School Ownership Groups

Archived Information

U.S. Department of Education Takes Enforcement Against Two School Ownership Groups

Office of Federal Student Aid issues letters denying recertification applications for Title IV eligibility to several Marinello Schools of Beauty and Computer Systems Institute locations
February 1, 2016

As part of the Obama Administration’s ongoing commitment to protect students and increase accountability and transparency in higher education, the U.S. Department of Education is taking action to end the participation in the federal student financial assistance programs of 23 Marinello Schools of Beauty (Marinello) campuses in Nevada and California and three Computer Systems Institute (CSI) campuses in Illinois.

Investigations by the Department’s Office of Federal Student Aid (FSA) uncovered serious violations within both institutions. The Department determined that CSI submitted false job placement rates to its students, the Department, and its national accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS). The Department determined that Marinello was knowingly requesting Federal aid for students based on invalid high school diplomas, underawarding Title IV aid to students, charging students for excessive overtime, and engaging in other acts of misrepresentation.

“Our students depend on higher education institutions to prepare them for careers through a quality education. Unfortunately, some schools violate their trust through deceptive marketing practices and defraud taxpayers by giving out student aid inappropriately. These unscrupulous institutions use questionable business practices or outright lie to both students and the federal government,” said Under Secretary Ted Mitchell. “In these cases we are taking aggressive action to protect students and taxpayers from further harm by these institutions.”

The Department is denying pending recertification applications for five Marinello locations covering 23 campuses in five cities and enrolling about 2,100 active students.

The campuses are:

  • Las Vegas, Nevada (2 Locations; 209 active students)
  • Los Angeles, California (14 locations; 1,277 active students)
  • Burbank, California (2 locations; 255 active students)
  • Moreno Valley, California (2 locations; 115 active students)
  • Sacramento, California (3 locations; 244 active students)

In addition, the Department previously placed all Marinello schools on Heightened Cash Monitoring 2, which is a step taken by FSA to provide additional oversight of institutions to safeguard taxpayer dollars.

The Department is also denying a pending recertification application from CSI, which enrolls about 2,600 active students.

The letters to the Marinello schools and CSI provide an opportunity for the institutions to submit factual evidence to dispute the Department’s findings. The Marinello schools have until February 16, 2016, to submit such evidence; CSI has until February 12, 2016, to do so. If submitted evidence causes the Department to change its determination, the schools could be able to continue participating in the federal financial aid programs.

The entire Marinello school chain – with 56 campuses across the nation – received more than $87 million in Pell Grants and federal loans for the 2014–15 award year.

Collectively, CSI campuses received approximately $20 million in federal funding for the 2014-15 award year.

For more information about today’s action, please visit StudentAid.gov/sa/about/announcements/marinello and StudentAid.gov/sa/about/announcements/csi.