August 1, 2019 - Issue: Vol. 165, No. 131 — Daily Edition116th Congress (2019 - 2020) - 1st Session
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DREAM CENTER; Congressional Record Vol. 165, No. 131
(Senate - August 01, 2019)
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[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. ____________________
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