[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.
____________________