Report: Top Ed Dept official, Dream Center execs corresponded over accreditation issues

Dive Brief:

• A new report from the House’s education committee finds that a top U.S. Education Department official corresponded extensively with executives at the Dream Center about the accreditation status of two of its now-shuttered colleges. The nonprofit’s attempt to run a roster of for-profit institutions collapsed last year.
• The committee’s probe centers on the department’s role in providing federal financial aid to two schools while they were unaccredited.
• The committee says its findings, which are based on documents and recordings provided by sources outside the department, conflict with the department’s previous accounts of events, including the extent of involvement by Diane Auer Jones, its principal deputy under secretary.

Dive Insight:

The Congressional inquiry concerns two Art Institutes acquired by the Dream Center that students and others have alleged the organization presented as accredited when they were not. Dream Center bought around 100 campuses from a for-profit college operator in a deal that fully closed in early 2018, though the attempt to run them quickly unraveled.

As part of its oversight of the transaction, the Higher Learning Commission (HLC) found that certain eligibility criteria for the two schools weren’t being met and so they would be transferred to an unaccredited status for a period of evaluation, interrupting their eligibility for federal student aid. A lawsuit, along with the committee report, contend Dream Center didn’t sufficiently notify students that the schools weren’t accredited. The committee report says the Dream Center agreed to the status change, and that HLC “repeatedly” told the organization to inform students of it. 

But the schools continued to receive federal funding and, according to the latest report, had worked with the department to get retroactive accreditation. Previous inquiries found that the department didn’t notify Congress about the decision, and only later did the department officially loosen its rules around backdating accreditation. 

According to the report, Auer Jones asked HLC staff to work directly with her on the retroactive approval, effectively bypassing career officials on the matter. 

In a statement emailed to Education Dive, Angela Morabito, a department spokesperson, called the report “a blatantly political attempt to blame Diane [Auer] Jones for the actions of the Higher Learning Commission.” The department told The Washington Post that Auer Jones had been in regular talks with Dream Center to prepare teach-outs. 

The department squared the blame on HLC in a staff report earlier this month, saying it didn’t follow its own rules when making the schools aware of the accreditation loss. The department also said HLC used inconsistent and vague language in their communications with the schools. 

The committee’s report, however, states that Dream Center showed “a misunderstanding of basic accreditation terms” and requirements concerning the colleges’ status, and that HLC and department policies clarify that the change would have rendered the schools unaccredited. The report also says Dream Center consented to the schools losing accreditation by agreeing to the status change.