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Thomas Jefferson University Pays $2.7 Million to Settle Student Loan Fraud Allegations

Posted  July 28, 2023

Thomas Jefferson University has agreed to pay $2.7 million to settle allegations concerning the misuse and improper retention of “primary care” student financial aid loans.

Education fraud encompasses traditional financial aid programs as well as specialty loan programs like the Primary Care Loan program at issue here. Congress established the Primary Care Loan program to address the nation’s shortage of primary care physicians. The program issues awards to medical schools to provide loans on favorable terms to students committed to practicing primary care for ten years after completing their medical degrees.

The settlement resolves allegations that between 2009 and 2016, rather than using the funds to finance the education of its students, Thomas Jefferson University invested a significant portion of the money in its endowment and retained the resulting earnings for its own purposes.

In 2017, Thomas Jefferson University returned approximately $5.6 million of excess cash in the Primary Care Loan Fund to the government. The recent settlement covers earnings the university allegedly gained from the improper investment of the funds between 2009 and 2016, as well as its retention of those earnings.

U.S. Attorney Jacqueline C. Romero emphasized the importance of using federal financial aid money for its intended purpose, stating, “when medical schools retain funds beyond their lending needs, it not only deprives students at other participating schools of opportunities to finance their education but also hampers the communities’ access to much-needed primary care physicians.”

Maureen R. Dixon, Special Agent in Charge for HHS-OIG, echoed the sentiment that schools must be held accountable for carefully managing federal funds. She stated, “[w]hen schools agree to participate in the Primary Care Loan program, they must carefully account for these federal funds to ensure that taxpayer dollars are used for public good. . . . We will continue to . . . investigate allegations relating to any misuse—including wrongful retention—of federal funds.”

This settlement serves as a crucial reminder to all schools receiving federal funds meant for students that the government expects strict adherence to program guidelines to safeguard taxpayer dollars and protect students’ interests.

If you have information relating to potential education fraud and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please do not hesitate to contact us for a free and confidential consultation.

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Tagged in: Education Fraud, Government Programs Fraud,