Trump Admin. Gave Millions In Loans, Grants To Unaccredited For-Profit Colleges
The Illinois Institute of Art and the Art Institute of Colorado lost their accreditation in early 2018, making them ineligible for federal loans and grants, but that did not stop the Department of Education from steering $10.7 million their way.
Documents released on Tuesday by the House Education and Labor Committee reveal that Education Department officials worked to shield Dream Center Education Holdings — the owner of the two schools — from the “consequences of lying to students about the accreditation of its since-closed schools,” according to The Washington Post.
The department also tried to shield itself from its decision to allow federal money to go to the schools.
Committee Chairman Robert C. “Bobby” Scott (D-Va.) has threatened to subpoena Education Secretary Betsy DeVos for more records related to Dream Center and said the department has obstructed the committee’s investigation into the matter.
Scott further said that “emails and letters paint a picture of a federal agency complicit in an effort to place profits before students.”
The two art schools had their accreditation status downgraded in January 2018 by the Higher Learning Commission, the accreditor with authority over the colleges. The commission “raised concerns about the quality of education at the campuses and downgraded their status for up to four years” after Dream Center acquired the schools in 2017.
Dream Center was instructed to inform students of the status change, but instead, the company continued advertising the schools as accredited. As students enrolled, the Education Department kept handing out loans, The Post reported.
In an effort to remedy the situation, the department issued a temporary retroactive status change for the schools from for-profit to nonprofit, as nonprofit colleges can receive federal financial aid even if they have the “preaccredited” status that Dream Center’s schools were given.
At that time, the company was trying to have the schools’ statuses changed permanently to nonprofit, which also carried the benefit of shielding “the company from having to report whether graduates were earning enough to repay their student loans.”
House Democrats were alarmed by what they learned as the situation unfolded.
“The grant of temporary nonprofit status was directed at what had at that time, been a five-month lapse in eligibility, and five months where Dream Center was receiving funds in violation of [the Higher Education Act] and accompanying regulations,” Scott told DeVos in a letter delivered on Tuesday. “This special treatment allowed more students to become entangled in Dream Center, magnifying the abrupt closure of the schools and the displacement of thousands of students.”