[Congressional Record Volume 165, Number 131 (Thursday, August 1, 2019)]
[Senate]
[Pages S5301-S5303]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              DREAM CENTER

  Mr. DURBIN.

     ``We've got a friend in Trump;
     He's lifting us out of our slump;
     We were down--and life was rough;
     Too many regs, were way too tough;
     After so many years;
     We'd just had enough, but;
     Now, we've got a friend in Trump.''

  Mr. President, that was a song, sung to the tune of Randy Newman's 
``You've Got a Friend in Me,'' written by a former lawyer for Dream 
Center Education Holdings about the prospects for their for-profit 
college enterprise under a Trump administration.
  Earlier this month, House Education and Labor Committee Chairman 
Bobby Scott sent a letter to Education Secretary Betsy DeVos which 
revealed damning new details about just how far Dream Center's 
``friends'' at the Trump/DeVos Department of Education would go to 
assist as they collapsed.
  Details, including that catchy little ditty, were later reported by 
the New York Times in an article entitled, ``Emails Show DeVos Aides 
Pulled Strings for Failing For-Profit Colleges.''
  I ask unanimous consent that the New York Times article be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, July 23, 2019]

 Emails Show DeVos Aides Pulled Strings for Failing For-Profit Colleges

                  (By Erica L. Green and Stacy Cowley)

       Washington.--Dream Center Education Holdings, a subsidiary 
     of a Los Angeles-based megachurch, had no experience in 
     higher education when it petitioned the federal Education 
     Department to let it take over a troubled chain of for-profit 
     trade schools.
       But the organization's chairman, Randall K. Barton, told 
     the education secretary, Betsy DeVos, that the foundation 
     wanted to ``help people live better lives.''
       The purchase was blessed despite Dream Center's lack of 
     experience and questionable finances by an administration 
     favorable to for-profit education. But barely a year later, 
     the company tumbled into insolvency, dozens of its colleges 
     closed abruptly and thousands of students were left with no 
     degree after paying tens of thousands of dollars in tuition.
       Making matters worse, the college is accused of enrolling 
     new students and taking their taxpayer-supported financial 
     aid dollars even after some of its campuses had lost their 
     accreditation, which rendered their credits worthless.
       Company emails, documents and recordings show that part of 
     why Dream Center kept going is that it thought the Education 
     Department, which under Ms. DeVos has rolled back regulations 
     on for-profit education, would try to keep it from failing. 
     Mr. Barton emailed other Dream Center executives that the 
     department's head of higher education policy--Diane Auer 
     Jones, a former executive and lobbyist for for-profit 
     colleges--had pulled strings to help the company's schools in 
     their effort to regain a seal of approval from an accreditor, 
     despite their perilous positions.
       In another instance, Dream Center's chief operating officer 
     told faculty at an endangered campus that Ms. Jones was 
     changing departmental regulations to help the schools obtain 
     accreditation retroactively.
       Although the Trump administration did eventually cut off 
     federal aid to the chain of colleges and precipitate their 
     collapse, Democrats say the department failed to respond to 
     warning signs.
       Representative Robert C. Scott, a Virginia Democrat who is 
     the chairman of the House Education Committee, unveiled a 
     trove of documents, including internal communication between 
     executives from Dream Center, in a letter to Ms. DeVos this 
     month. He said the documents suggest that Ms. Jones misled 
     Congress about her efforts to help shield Dream Center from 
     its misdeeds.
       ``The actions of Dream Center and the Department of 
     Education's execution of its responsibility to protect 
     students raise grave concerns,'' Mr. Scott wrote.
       Instead of requiring Dream Center to take action, ``the 
     department informed Dream Center executives that it would 
     work to retroactively accredit the institutions during the 
     periods they had lied to students--rewriting history to erase 
     Dream Center's deceptive marketing practices,'' Mr. Scott 
     wrote.
       The Education Department has maintained it did nothing 
     wrong.
       ``This story is based entirely on a wrongful premise,'' the 
     department wrote in a statement. ``The full and complete 
     timeline shows Dream Center did not receive any unique 
     benefits from policy decisions made by the department. We 
     simply worked to try and get as many students into a new 
     program as possible. While we did not achieve a perfect 
     outcome, our actions helped thousands of students land on 
     their feet.''
       In a response letter to Mr. Scott on Monday, the 
     department's acting general counsel, Reed D. Rubinstein, 
     submitted documentation that he said contradicted the 
     committee's ``unfair suggestions'' that the department 
     tailored its policies to assist Dream Center and was not 
     forthcoming with Congress. ``The Department categorically 
     rejects these allegations,'' he wrote.
       ``Dream Center's management received no special 
     treatment,'' he said.
       President Trump has moved to deregulate any number of 
     industries, from mining and offshore oil exploration to 
     chemicals and Internet providers. But Ms. DeVos's efforts to 
     get the government off the backs of for-profit colleges have 
     come under particular scrutiny, in part because of the 
     spectacular implosions of for-profit college chains only a 
     few years ago, in part because people who once worked in the 
     sector have led the DeVos deregulatory push.
       Dream Center's collapse was the first of the new 
     deregulatory era. Yet Education Department officials 
     insisted, repeatedly, that its demise had nothing to do with 
     the administration's policies or efforts. Ms. Jones told 
     Congress that she did not even know of Dream Center's 
     accreditation problems at the time the company said she was 
     working to get it out of its jam. She also told lawmakers the 
     policy change extending retroactive accreditation had 
     ``nothing to do with the Dream Center.''
       Those assurances are now being questioned.
       ``The documents further suggest that department officials 
     were not forthcoming to Congress and the public about the 
     information they had about Dream Center's status and 
     practices,'' Mr. Scott wrote. He is requesting emails, text 
     messages and interviews with several department officials, 
     including Ms. Jones.
       The letter and documents ``raise questions about whether 
     the department took steps to allow Dream Center to mislead 
     students,'' Mr. Scott said.
       From the start, the Education Department overlooked red 
     flags when, in late 2017, Dream Center took control of more 
     than 100 campuses with 50,000 students from a for-profit 
     higher-education company, Education Management Corporation. 
     Around that time, Dream Center's accreditor, the Higher 
     Learning Commission, notified the organization that it was 
     about to change two of its schools' accreditation status. Two 
     Education Department officials, including the agency's 
     director of accreditation, were copied on the letter.
       In January 2018 the accreditor published a notification on 
     its website stating that the two Dream Center schools were 
     not accredited by the Higher Learning Commission. It ordered 
     Dream Center to tell students that their courses and degrees 
     ``may not be accepted in transfer to other colleges and 
     universities or recognized by prospective employers.''
       Yet for five months, Dream Center kept advertising, ``We 
     remain accredited.''
       By July 2018, Dream Center was running out of cash and knew 
     its accreditation problems could worsen its financial strain. 
     Emails from that month obtained by the House Education 
     Committee indicate that Dream Center officials believed that 
     the Education Department was maneuvering to help it stave off 
     catastrophe.
       In written responses to questions from Congress, the 
     Education Department said Ms. Jones was first made aware that 
     the two Dream Center institutions were not accredited on July 
     10, 2018. She was unaware of the public notice that the 
     Higher Learning Commission had issued nearly six months 
     earlier, according to the agency. She was notified a week 
     later that the institutions were misrepresenting their 
     accreditation status and ordered them the next day to stop, 
     the department said.
       Ms. Jones was asked during a House Oversight Committee 
     hearing this spring whether a policy she had issued later 
     that month that allowed accreditations to be granted 
     retroactively was aimed at helping Dream Center. ``Absolutely 
     not. It had nothing to do with the Dream Center,'' she 
     answered.
       But in company emails, Dream Center executives indicated 
     the Education Department tipped them off on July 3, 2018, 
     that a new retroactive accreditation policy was coming, a 
     week before Ms. Jones said she even knew Dream Center had a 
     problem.
       ``We just got off the phone with DOE,'' Mr. Barton wrote. 
     ``It appears HLC is in sync with retro'' accreditation.
       He said Ms. Jones--whom he directly cited by name--had 
     worked with accreditors, and ``they will all agree to one 
     plan with department blessing.''
       Mr. Barton did not respond to requests for comment on his 
     emails.
       On July 11, Dream Center's chief operating officer told 
     faculty in a meeting on an Illinois campus that the 
     department would allow the schools' accreditor to grant 
     retroactive accreditation. He said department officials 
     ``changed their regulation to open the door to letting it 
     happen,'' according to a recording of the meeting obtained by 
     the committee. He referred to a conversation with Ms. Jones 
     the week prior where ``she said everybody was going to be 
     accommodating.''
       Weeks later, on July 25, Ms. Jones finalized the plan 
     allowing retroactive accreditation, which was a major win for 
     Dream Center.

[[Page S5302]]

     While the schools were already slated for closure, 
     retroactive accreditation would have shielded the company 
     from legal action for making misleading statements about its 
     accreditation status.
       Ms. Jones said she had begun to revise that guidance months 
     earlier to allay longstanding concerns about the department's 
     policy stemming from a dispute involving an accreditor of a 
     nursing program. The retroactive policy would have also 
     allowed students to more easily transfer their credits if 
     they were earned at an accredited institution.
       In response to Mr. Scott's accusations, Ms. Jones said, in 
     a written statement to The New York Times, ``The retroactive 
     accreditation policy--which had been under discussion long 
     before I arrived at the department--decided not whether Dream 
     Center would live or die, but whether or not students could 
     transfer their credits for the hard work they had 
     completed.''
       In August, after it became public that the two schools 
     would close, Dream Center's head of regulatory and government 
     affairs wrote an email to other Dream Center officials 
     reminding them that communication should be kept confidential 
     because ``Diane is really working behind the scenes to help 
     guide us and keep the accreditors aligned.''
       Ms. Jones did not directly address the July 3 and July 11 
     communication from Dream Center officials, but acknowledged 
     that she had worked with accreditors. She called the Dream 
     Center accreditation issue a ``messy and complex situation'' 
     and said the accreditor had sent mixed messages about the 
     status of Dream Center's schools.
       Ms. Jones had acknowledged to Congress that she had 
     concerns about the organization's capacity to manage its 
     closures, and was in regular communication with a group of 
     accreditors to devise a plan to allow Dream Center students 
     to complete their degrees, known as a ``teach-out,'' after 
     their campuses closed.
       ``My goal was to get as many of the more than 8,000 
     students to new institutions where they could complete their 
     programs,'' she said. ``I stand firm in my decision to work 
     collaboratively with accreditors to hold Dream Center 
     accountable. That Dream Center executives characterize this 
     as being about them is disingenuous but not surprising. They 
     were trying to make it appear they had control of the mess 
     they had made.''
       A group of students, represented by the National Student 
     Legal Defense Network, filed a lawsuit last year, saying 
     Dream Center issued ``false and misleading'' statements about 
     its accreditation status, which broke state laws and caused 
     ``substantial harm'' to more than 1,000 students.
       Mr. Scott also pointed to emails documenting the steps the 
     Education Department took to help Dream Center get hold of 
     some much-needed cash to prop up its failing campuses.
       In an October 2018 email, Dream Center officials were 
     preparing to request funding from an escrow account managed 
     by the department.
       The funds were intended to offset taxpayer liabilities if 
     some of the chain's schools closed or failed. Dream Center 
     wanted to use part of the money to pay for expenses 
     associated with closing campuses and helping current students 
     complete their degrees. The department had in August agreed 
     to release up to $50 million; Dream Center wanted more.
       Dennis Cariello, a Dream Center lawyer, sent an email to 
     company executives before a meeting with A. Wayne Johnson, 
     who headed the department's office of financial aid. At the 
     meeting, Mr. Cariello planned to deliver a ``list of the 
     asks'' that amounted to $75 million.
       Mr. Cariello communicated that Mr. Johnson ``asked that I 
     review the draw requests--there are a few we can't have in 
     there--bonuses and future rental payments were issues for 
     him.''
       Mr. Cariello declined to comment on the exchange. The 
     department had released a total of $40 million from the 
     escrow account to Dream Center by the end of last year, 
     according to records it sent in response to questions from 
     Congress.
       Education Department officials have maintained that they 
     worked tirelessly to mitigate the fallout of the Dream Center 
     collapse. The department restricted the schools' cash flow 
     from federal student loans after Dream Center went into 
     receivership in January, barely a month before it cut off 
     federal student loan funds to Argosy University. That final 
     move was considered the death knell for the company.
       But until then, Dream Center executives had reason to 
     believe they had friends at the Education Department. In 
     January 2018, just as Dream Center's schools lost their 
     accreditation, Ronald L. Holt, a regulatory lawyer on the 
     Dream Center team, sent a presentation to Dream Center 
     executives on the state of higher education a year into the 
     Trump administration.
       It Included a song he wrote titled, ``You've Got a Friend 
     in Trump,'' to the tune of Randy Newman's ``You've Got a 
     Friend in Me,'' used in the movie ``Toy Story.''

     We've got a friend in Trump
     He's lifting us out of our slump
     We were down--and life was rough
     Too many regs, were way too tough
     After so many years
     We'd just had enough, but
     Now, we've got a friend in Trump

  Mr. DURBIN. Mr. President, back in 2017, Dream Center Education 
Holdings, the spinoff of a Christian charity with no previous 
experience in higher education, announced its intention to acquire the 
campuses of the failing for-profit giant Education Management 
Corporation, EDMC, and convert them to nonprofit status.
  Among EDMC's most notable brands were the Art Institutes and Argosy 
University.
  I joined several of my Senate colleagues at the time, raising 
concerns about Dream Center's ability to effectively manage this higher 
education enterprise in the best interests of students and taxpayers.
  Despite our concerns, Secretary DeVos's Department of Education gave 
its preliminary approval to the transaction in October 2017, without 
conditioning that approval on any restrictions or protections for 
students and taxpayers.
  The Department's failure to protect students and taxpayers at this 
critical juncture set up a chain of events that left thousands of 
students harmed and millions in taxpayer dollars wasted.
  In November 2017, as part of its own approval of that transaction, 
the Higher Learning Commission, HLC, removed accreditation from Dream 
Center's newly acquired Art Institute of Colorado and the Illinois 
Institute of Art effective January 20, 2018.
  HLC transitioned these schools to ``candidates for accreditation,'' 
during which time they could still receive Title IV funds.
  HLC noted that the loss of accreditation could have serious 
consequences for current and prospective students and that students 
``should know that their courses or degrees are not accredited by HLC 
and may not be accepted in transfer to other colleges and universities 
or recognized by prospective employers.''
  Because of these risks, HLC required Dream Center to provide students 
with ``proper advisement and accommodations.''
  But Dream Center failed to comply with these requirements and instead 
continued to falsely advertise to students that these institutions 
``remain accredited.''
  In June 2018, when several news articles brought the 
misrepresentation to light, I wrote to the Higher Learning Commission 
asking them to investigate.
  I also sent a copy of that letter to the Department of Education.
  Then, in August 2018, an article by David Halperin alleged that the 
top DeVos postsecondary education official, Diane Auer Jones, directed 
Dream Center to continue to represent the Illinois and Colorado 
campuses as accredited while she worked behind the scenes to 
orchestrate retroactive accreditation.
  As Chairman Scott put it in his recent letter, it was an attempt at 
``rewriting history to erase Dream Center's deceptive marketing 
practices.''
  And, it required changing Department regulations.
  I wrote to Secretary DeVos in August about these troubling 
accusations.
  In a December 4, 2018, response, signed by then-Assistant Secretary 
for Legislation and Congressional Affairs Peter Oppenheim, the 
Department denied the allegations.
  Instead, Mr. Oppenheim's letter asserts that Ms. Jones didn't learn 
about the misrepresentation until July 17, 2018.
  In response to subsequent written questions, Secretary DeVos further 
stated to me that Ms. Jones first learned that HLC had withdrawn 
accreditation from the Illinois and Colorado campuses on July 10, 2018.
  But, according to emails obtained and released by Chairman Scott, Ms. 
Jones appears to have been already working to change Department 
regulations to allow Dream Center to obtain retroactive accreditation 
before these dates.
  A July 3, 2018, internal Dream Center email reads, ``We just got off 
the phone with [the Department of Education]. It appears HLC is in sync 
with retro-[accreditation].''
  Diane Jones is specifically mentioned in the email as being the 
Department official working with accreditors to facilitate this.
  As reported by the New York Times, in a recorded meeting on July 11, 
2018, Dream Center's chief operating officer told faculty in Illinois 
that the Department was working to change its regulations to allow 
retroactive accreditation.

[[Page S5303]]

  As evidence, he specifically referred to a conversation the week 
before with Ms. Jones.
  These revelations raise the prospect that Secretary DeVos, Ms. Jones, 
and other Department officials may have misled me and other members of 
Congress in their responses to questions on this matter.
  Ultimately, the Dream Center debacle led to thousands of students 
being lured into a predatory enterprise on the verge of collapse.
  The question is, to what extent did the DeVos Department of 
Education, and Ms. Jones in particular, inappropriately aid and abet 
Dream Center's exploitation of students and bilking of taxpayers as the 
company collapsed.
  In February of this year, House Labor-HHS-Education Appropriations 
Subcommittee Chairwoman Rosa DeLauro and I asked the Department's 
Office of Inspector General to investigate the Department's role in the 
Dream Center collapse.
  Now, the revelations accompanying Chairman Scott's letter, raise 
serious questions about the Department's truthfulness with Congress and 
a potential attempt to cover up inappropriate involvement by Ms. Jones 
or others.
  In his letter, Chairman requested transcribed interviews with several 
Department officials, including Ms. Jones, and a host of documents and 
correspondence.
  I call on Secretary DeVos to immediately comply with these requests, 
to direct her Department to fully cooperate with Chairman Scott without 
delay. Anything less and we will be forced to ask what exactly 
Secretary DeVos is trying to hide.

                          ____________________