May 16, 2019

DeVos Department Denies Directing Dream Center to Deceive

DeVos Department Denies Directing Dream Center to Deceive

In a new letter to Senator Dick Durbin (D-IL) and other members of Congress, Diane Auer Jones, Betsy DeVos’s top higher education aide, reaffirms the Department’s claim that it never advised Dream Center Education Holdings to publicly misrepresent its accreditation status — contrary to an allegation made to me last year, and reaffirmed again to me today, by a source close to DCEH.

A year ago today, May 16, 2018, I first reported that a DCEH web page addressing accreditation said as to the company’s Illinois Institute of Art and Art Institute of Colorado that each school “is in transition during a change of ownership. We remain accredited as a candidate school seeking accreditation under new ownership and our new non-profit status” — even though the schools’ accreditor, Higher Learning Commission, had taken action effective January 20, 2018, to change the status of the two schools from “Accredited” to “Candidate” and explained, “During candidacy status, an institution is not accredited….”

That false claim remained on DCEH’s website until mid-June 2018, around the time the Pittsburgh Post-Gazette inquired about the discrepancy.

Thus for five months DCEH schools recruited new students and accepted tuition payments from students while falsely claiming they were accredited institutions. Annual tuition was about $30,000. Students were shocked to eventually learn that they were attending an unaccredited school, a status that sharply diminishes the value of their degrees and credits for employers and others. (On December 10, 2018, Art Institutes students filed a class action lawsuit over DCEH’s misstatement of its accreditation.)

On June 26, 2018, Senator Durbin wrote to Higher Learning Commission, asking the accreditor to investigate and take appropriate action regarding DCEH’s misrepresentations. Durbin copied the letter to Julian Schmoke, Chief Enforcement Officer at the Department.

On August 2, 2018, I reported, based on the account of a source close to DCEH management, that in early 2018, a team of Department officials led by senior adviser Diane Auer Jones told a DCEH delegation to publicly represent that two of the company’s Art Institutes schools remained accredited.

Although the source was seeking to take the blame off DCEH for the website statement, he also argued that the Department’s direction was appropriate, because, he argued, Higher Learning Commission had acted inappropriately in placing the schools on “candidate” status following DCEH’s takeover of their operations and that no student was misled because the schools remained eligible to receive federal student financial aid and because the retroactive restoration of the schools’ accreditation was inevitable.

In fact, HLC never did restore the accreditation of the two schools, each of which shut down at the end of 2018.

On August 30, 2018, four Democratic senators — Dick Durbin (IL), Elizabeth Warren (MA), Richard Blumenthal (CT), and Sherrod Brown (OH) — wrote to DeVos about the “troubling allegations” in my article that a Department of Education team encouraged DCEH to misrepresent the accreditation status of its Illinois Institute of Art and Art Institute of Colorado campuses. The senators’ letter requested a response from DeVos about what occurred and whether the Department had opened an investigation into allegations that DCEH misrepresented the accreditation status of its schools.

Now, I have obtained two letters from the Department in response to letters from Senator Durbin and other members of Congress about this matter: one dated May 9, 2019, signed by Diane Jones, and an earlier letter dated December 4, 2018, signed by Peter Oppenheim, Assistant Secretary for Legislation and Congressional Affairs.

The December 4 Oppenheim letter says there were only two meetings between Department and DCEH officials “at Department headquarters,” that they occurred on June 14, 2018, and July 18, 2018, and that at neither meeting did Jones or any other Department official tell DCEH to misrepresent its accreditation.

Oppenheim states, “It was not until a July 17, 2018, conversation with regional accreditors that Ms. Jones learned that DCEH had incorrectly described its accreditation status to students. She notified Dream Center verbally and in writing on July 18, 2018, that they had to correct their websites and provide written communication to all students at the Colorado and Illinois campuses….”

By then, as described above, DCEH already had corrected its false statement on the website.

I was saddened to discover from this response that Diane Jones does not read Republic Report, nor the Pittsburgh Post-Gazette. Seriously, though, I am alarmed that, according to this account, no one told Jones, the Department’s top higher education official, anything about this controversy — a major career college having posted for students a blatantly false statement about a critically important matter — for more than two months after it had been publicly exposed.

In response to a question from the Members of Congress as to whether the Department had opened an investigation into DCEH’s misrepresentation of accreditation strategy, Oppenheim said no. He said, “The Department is satisfied that the prior misinformation about the institutions’ accreditation status was the result of the unique nature of HLC’s change of control candidacy status, given that the schools had full accreditation the day before the change in ownership. The Department understands that this may have been the first time that HLC implemented its change of control candidacy status, and will be reviewing the policies related to the status (as written and as applied in this case) to determine whether they are in compliance with Department regulations.”

The new May 9 letter from Jones to Durbin and others follows in the same vein.

After defending the Department’s role in the troubling shut-down of DCEH campuses across the country, Jones, like Oppenheim, indicates that she learned of the DCEH misstatement from HLC and directed DCEH to fix the problem (although if, as Oppenheim claimed, this did not occur until July 17, DCEH had made the key fix on its website a full month earlier). Jones then expresses concern that HLC’s decision to place the DCEH schools in candidate status may have violated Department regulations and HLC’s own policies.  “Accordingly,” Jones writes, “The Department intends to conduct a review of HLC’s candidacy and preaccreditation standards and its application of those standards, including with regard to the Art Institutes.”

Collectively, Jones and Oppenheim are saying the following: The Department never told DCEH to lie to students about HLC taking away its accreditation, but DCEH sure had a point, and we’re going to investigate HLC, not DCEH.

Today I went back to the source for my August 2 article. He was pleased to hear that the Department was telling Congress that HLC was in the wrong, which he considered vindication for DCEH’s position that misstating its accreditation to students was not really a big deal. He insists, in fact, that it wasn’t even a lie.

But as to whether the Department told DCEH what to say on its website, my source insisted his previous account was correct. And he added details.

He said Department of Education officials told DCEH in late 2017 that they would work out any accreditation issues with HLC. He said DCEH CEO Brent Richardson and chairman Randall Barton would not have gone forward with the acquisition of the former EDMC schools — the Art Institutes, Argosy University, and South University — without such assurance. “It was a condition of closing that the Department would handle it…  Diane Jones promised” the Department would fix the accreditation problem.  

My source says DCEH was ready to sue HLC for suspending the accreditation — it had hired a lawyer and drafted a complaint — but Jones told them not to, and a Department official told DCEH what to say about their accreditation status on the website. This occurred (perhaps not at a large in-person meeting at the Department, as he had previously told me) long before the June and July 2018 sessions cited by the Department.

My source added that Jones refused to communicate with DCEH leadership by email; she wanted texts or phone calls only, and she asked that she communicate with Richardson through an intermediary, his aide Shelly Murphy.

I don’t know who is telling the truth about all this. I only know that DCEH misstated its accreditation to students, who thus believed they were attending an accredited school, when they were not. Even if the Department were correct that HLC made mistakes, the solution was not for DCEH to tell students a lie — a lie that may have badly damaged their educational and financial futures — and the Department’s unwillingness to confront that issue implies at the very least complicity after the fact.

Brent Richardson and Randall Barton have not responded to my request for comment.  The Department of Education has not responded, either, although perhaps Diane Auer Jones will be asked about this matter if she ever comes before Congress. Although Jones holds the elaborate title “Principal Deputy Under Secretary delegated to perform the duties of Under Secretary and Assistant Secretary for Postsecondary Education,” meaning she’s in charge of the Department’s higher education work, there is no indication that she, or anyone, will be formally nominated to the Under Secretary or Assistant Secretary job, which would require Senate confirmation.

It seems clear why even the brazen Trump administration would not want to present Diane Auer Jones at a Senate confirmation hearing. Her involvement is apparent in a range of regulatory and enforcement decisions that have tailored the Department’s policies to the wish list of the worst predatory actors in the for-profit college industry. Jones’s involvement in this abandonment of accountability measures is particularly troubling because before joining the DeVos Department she worked for some of those same egregious actors, including the college chains Career Education Corp. and CollegeAmerica, both of which have extensive records of deceiving and abusing students, and the trade association CECU/APSCU, which has harbored some of the industry’s worst predators.

UPDATE 05-22-19 11:15 am:

Diane Auer Jones is testifying today before a House Oversight subcommittee.  (I’m also testifying at the hearing.)

The Department again addressed the DCEH “remain accredited” controversy in answers to questions for the record submitted by Senator Durbin following testimony by DeVos before the Senate Appropriations Committee. This time the Department goes further regarding HLC’s action to suspend accreditation of the two Ai campuses, stating “the Department must emphasize that is not true that the campuses were not accredited during this period.” At the same time, the Department reports, “On July 17, 2017, during a call with accreditors, HLC notified Ms. Jones that these institutions had misrepresented their accreditation status on their websites…. On July 18, 2018, during the meeting with DCEH, Ms. Jones told DCEH employees that they needed to update their websites to accurately reflect their accreditation status using the language provided by HLC.” So the Department’s position is that (1) it never told DCEH to misrepresent its accreditation; (2) when Ms. Jones learned, in July, that DCEH had misrepresented its accreditation, she demanded they correct the misrepresentation; but (3) DCEH did not misrepresent its accreditation.