By:  Danielle Douglas-Gabriel
Source: The Washington Post

House committee subpoenas Education Dept. staff over handling of failing for-profit colleges

The House Education Committee issued subpoenas to career staff at the Education Department on Thursday seeking information regarding the federal agency’s role in helping Dream Center Education Holdings as the for-profit college operator spiraled into insolvency.  

The legal request comes after more than a year of attempts by the committee to obtain documents and interviews from department personnel about the demise of Dream Center, owner of the Art Institutes, South University and Argosy University.

A committee investigation found that Dream Center deceptively enrolled students at campuses that had lost accreditation and raked in taxpayer money in the process. Investigators say the Trump administration tried to shield the company from the consequences of its lies and shield itself from an ill-fated decision to allow millions of dollars to flow to those schools.

In a letter to Education Secretary Betsy DeVos obtained by The Washington Post, committee chairman Rep. Robert C. “Bobby” Scott (D-Va.) said the department has obstructed the investigation at every turn.

“The Department has regularly ignored the Committee’s emails and requests to negotiate. [It] has repeatedly agreed to prioritize certain requested documents only to later abandon those commitments and instead produce unrelated documents,” Scott wrote in the letter dated Oct. 22. “When the Department ultimately complied … it provided almost entirely redacted document sets without indicating why essential content was withheld.”

The House committee has asked three senior career staffers, whose names the committee declined to provide, to testify at depositions to be held next month.

Education Department spokeswoman Angela Morabito said it is “wholly unreasonable” to subpoena career civil servants in this case, especially when the federal agency has offered the committee thousands of pages of requested documents.

“Instead of conducting business in a lawful, rational, and responsible way, the unhinged Democrats have resorted to badgering career civil servants to carry on what is nothing more than a witch hunt,” Morabito said. 

Dream Center’s acquisition of the for-profit schools has become a black eye for the Education Department. DeVos supported the 2017 deal even though the company, an arm of a Christian nonprofit organization, had no higher education experience.

The Los Angeles company needed the blessing of the Education Department and several accrediting agencies, including the Higher Learning Commission. As a condition of its approval, the commission downgraded the accreditation of two Art Institute campuses until they could improve the quality of instruction.

According to the congressional investigation, the commission told Dream Center in January 2018 to inform its students that the two Art Institutes were no longer accredited, but the company waited until June of that year to take action. Students kept enrolling, earning credits and degrees that were rendered worthless by the loss of accreditation.

The Education Department continued to provide students nearly $11 million in loans, even though for-profit colleges must be fully accredited to participate in federal student aid programs. To rectify the problem, the department in May 2018 designated the schools as nonprofits effective Jan. 20, 2018, the date they lost their accreditation, according to letters obtained by the committee.

The move allowed Dream Center to circumvent rules governing for-profit institutions and helped justify the department’s decision to let millions of dollars to flow to the campuses. But Dream Center still needed the blessing of the commission for the credits and degrees it conferred to students during the lapse in accreditation to have value. As the company hemorrhaged money and the closure of the campuses was imminent, that approval became critical and the Trump administration stepped in again.

A batch of text messages, emails and letters released this summer by the committee and in a lawsuit show that Diane Auer Jones, the head of higher education policy at the department, unsuccessfully pressured the commission to restore accreditation at the Dream Center schools. Jones sent and received more than 100 text messages from multiple officials at Dream Center discussing the accreditation problem and the company’s dire financial situation.

After struggling to turn its for-profit colleges around, Dream Center spent months trying to close and sell campuses to meet financial obligations. When it fell short, the company in January 2019 entered into a form of bankruptcy. By March 2019, the entire chain folded after millions of dollars in federal financial aid owed to Argosy students disappeared and the department cut off the school’s access to grants and loans.