Section 481(b)(2) of the Higher Education Act of 1965, as amended (HEA), requires postsecondary institutions’ short-term programs to provide training that prepares a student for gainful employment, and to have verified completion and placement rates of at least 70 percent to be eligible to participate in the William D. Ford Federal Direct Loan (Direct Loan) program. We inspected Rosedale Technical College’s (Rosedale) compliance with short-term program requirements— specifically, whether Rosedale’s truck driving program met the completion and placement rate requirements for the 2023–2024 award year.
Rosedale’s truck driving program did not meet all short-term program eligibility requirements in the HEA. Specifically, it did not maintain at least a 70 percent placement rate. Rosedale incorrectly calculated its program’s completion and placement rates for the 2023–2024 award year by including students who should have been excluded from these calculations. Because it did not meet eligibility requirements, Rosedale’s program became ineligible for the Direct Loan program as of the 2024–2025 award year. In addition, because Rosedale provided inaccurate completion and placement rate percentages, prospective students and their parents might have made enrollment decisions based on this unreliable information.
We made three recommendations to the Chief Operating Officer for Federal Student Aid (FSA) to require Rosedale officials to design and implement effective procedures and return all Direct Loan funds awarded to students enrolled in the short-term program after the 2023–2024 award year. In addition, we recommended that the Chief Operating Officer for FSA review the Title IV eligibility of Rosedale’s short-term program for award years beginning on or after July 1, 2024.