Betsy DeVos and Her “For-Profit College Crew” Give Industry Another Leg Up

The Trump/DeVos Education Department’s New Handbook for College Accreditors Makes It Easier For For-Profit Schools To Operate And Become Eligible For Federal Aid


WASHINGTON, D.C. — Yesterday, Education Secretary Betsy DeVos released a new 28-page accreditation guide explaining how the department will evaluate whether a college accreditor is meeting federal standards, including the type of evidence and expected documents. Rather than waiting out the standard federal rule-making process, DeVos and her for-profit colleagues at the Department of Education published the guidelines to give industry a head start under the guise of “streamlining” the process.

Education Secretary Betsy DeVos has stacked her department with the corporate alumni of shady for-profit colleges that make obscene amounts of money on the backs of student borrowers. DeVos’ actions on for-profits have been nothing more than handouts to the industry that once employed the top political appointees at ED,” said Derek Martin, director of Allied Progress.

He continued, “It’s clear what’s happening. Rather than going through the normal rulemaking process, DeVos and her colleagues decided to publish these “guidelines” to give industry a head start. Why? So that predatory for-profit colleges will be able to operate without strict oversight and students can then access federal aid sooner rather than later.” 

Ignoring staff recommendations, DeVos already effectively reversed an Obama-era decision and reinstated the Accrediting Council for Independent Colleges and Schools (ACICS) last September, a “derelict accreditor” that flouted “nearly 60 federal regulations” and “rubber-stamped” fraudulent for-profit schools that cheated students. With these new rules, ACICS certainly won’t be the last questionable accreditor who will see a new era of less oversight.

WHAT YOU NEED TO KNOW:

Betsy DeVos Is Making It Easier For Accreditors To Rubber-Stamp For-Profit Colleges That Prey On Student Borrowers

Betsy DeVos Has Already Announced She Is Loosening Regulations For College Accreditors To Make It Easier For Them To Avoid Oversight—And Now Has Released New Guidelines On How The Administration Will Evaluate Their Compliance With Federal Law.

This Month, Betsy DeVos Has Already Proposed Loosening “Federal Standards For College Accreditors,” Which Could “Unravel” Oversight And Give Low-Quality Programs Access To Federal Student Aid Money…

Betsy DeVos’ Proposal Would “Loosen Federal Standards For College Accreditors” And Make It Easier For “Accreditors Who Don’t Fully Meet Federal Standards Retain Their Approval.” “Betsy DeVos issued a proposal to loosen federal standards for college accreditors, arguing that the changes would spur innovation. The education secretary wants to allow colleges to expedite plans to outsource programs and to add new degree offerings or branch campuses without getting an accreditor’s approval. The changes also would make it easier for accreditors who don’t fully meet federal standards to retain their approval.” [Andrew Kreighbaum, “Rewriting the Rule Book for College Accreditors,” Inside Higher Ed, 06/12/19]

  • Consumer Advocates Warn That The Proposed Rules Would “Unravel Oversight Of Colleges” And “Allow More Low-Quality Programs To […] Access Federal Student Aid.”“But consumer advocates and other critics have warned that the proposal would unravel oversight of colleges and allow more low-quality programs to enroll students and access federal student aid.” [Andrew Kreighbaum, “Rewriting the Rule Book for College Accreditors,” Inside Higher Ed, 06/12/19]

…And Now Has Released New Guidelines For College Accreditors That Explain How The Administration Will Determine If They Meet Federal Standards.

ED Has “Unveiled New Guidelines For What College Accreditors Must Do To Obtain And Keep Their Federal Recognition” That “Explain How Education Department Officials Will Evaluate Whether A College Accreditor Is Meeting Federal Standards, Including What Type Of Evidence And Documentation They Expect.” “The Trump administration today unveiled new guidelines for what college accreditors must do to obtain and keep their federal recognition. The Education Department said in a statement that the new 28-page handbook for college accreditors was clearer and more streamlined than the previous version, which was released in 2012 and spans 88 pages. The guidelines are technically voluntary, but they explain how Education Department officials will evaluate whether a college accreditor is meeting federal standards, including what type of evidence and documentation they expect. The new version released by the Trump administration also contemplates site visits by department staff to the offices of an accreditor that is under federal review.” [Michael Stratford, “DeVos issues new guidelines for college accreditors,” Politico, 06/20/19]

Betsy DeVos Ignored Repeated Staff Recommendations And Reinstated An Accreditor Whose Status Was Revoked By The Obama Administration After It “Rubber-Stamped” Fraudulent Schools And Violated “Nearly 60 Federal Regulations.”

In September 2018, The Department Of Education “Effectively Reversed” An Obama-Era Decision And Reinstated the Accrediting Council for Independent Colleges and Schools (ACICS), A “Derelict Accreditor” That “Rubber-Stamped” Fraudulent For-Profit Schools That Cheated Students And Flouted “Nearly 60 Federal Regulations.”“Nearly two years ago, the U.S. Education Department finalized a decision to strip a controversial accrediting agency of its federal recognition, ending its ability to serve as a gatekeeper for federal student aid. However, following a court decision and review of more than 30,000 pages of documents, a senior official at the department has now effectively reversed that decision. A letter to the Accrediting Council for Independent Colleges and Schools, dated September 28, concluded that the council was now in compliance with all but two of the necessary standards for recognition.” [Eric Kelderman, “Education Department Moves to Give Controversial Accreditor of For-Profits Another ChanceThe Chronicle of Higher Education, 09/29/18]

Betsy DeVos Ignored The Recommendations Of ED Officials Who “For The Second Time In Less Than Two Years” Recommended Against ACICS’ Approval And Found The Accreditor “Fail[ed] To Meet Nearly 60 Federal Regulations On Accreditation.” “For the second time in less than two years, officials at the U.S. Department of Education have recommended against approving a controversial accrediting agency that primarily oversees for-profit colleges. But their finding may have little effect on the accreditor’s future. […] the department released a 244-page document advising that the Accrediting Council for Independent Colleges and Schools, known as Acics, fails to meet nearly 60 federal regulations on accreditation. The analysis is a draft of a report that was meant to be released in May at a hearing scheduled to consider the accreditor’s status. That hearing was cancelled following a judge’s order in a lawsuit filed by the council.” [Eric Kelderman, “Education Dept. Report Says No to a For-Profit Accreditor — but It Might Not Matter,”The Chronicle Of Higher Education, 06/09/18]

In An April 2018 Letter, Ten Senators Raised Concerns That Betsy DeVos’ ED Would Reinstate The Accrediting Council For Independent Colleges And Schools (ACICS), An Accreditor That “Oversaw The Biggest Collapse of For-Profit Colleges In The History Of Federal Student Aid.” “Among the concerns raised in the eight-page letter: Lawmakers say they are suspicious of Jones having the power to recommend whether the Accrediting Council for Independent Colleges and Schools should be fully reinstated. The Obama administration stripped the organization of its power in December 2016, after deciding it was incapable of rectifying years of lax oversight. The organization accredited some of the biggest names in the for-profit college industry, including several once owned by Career Education, where Jones worked from 2010 to 2015.” [Danielle Douglas-Gabriel, “Senate Democrats question the role of a former for-profit college lobbyist at the Education Department,” The Washington Post, 04/28/18]

  • Sen. Richard Blumenthal (D-CT) Said He Had “Significant” Concern That Betsy DeVos’ Appointee Diane Auer Jones Might Favor An Accreditor That “Rubber-Stamped” Fraudulent And Abusive Schools. “‘I have significant, specific concerns regarding Ms. Jones’ ability to oversee a derelict accreditor that has rubber-stamped the flow of federal dollars to colleges and universities that engaged in widespread fraud and abuse — the very same colleges and universities she has worked for most of her career,’ Sen. Richard Blumenthal (D-Conn.), one of the 10 lawmakers who signed the letter, said in an email to The Washington Post.”  [Danielle Douglas-Gabriel, “Senate Democrats question the role of a former for-profit college lobbyist at the Education Department,” The Washington Post, 04/28/18]

Betsy DeVos Has A History Of Investing In Companies That Profit Off The Backs of Student Loan Borrowers Like For-Profit Colleges And Student Loan Refinancers.

For-Profit Colleges Are A “Disproportionately Large Segment” Of The Student Loan Crisis – Accounting For Half Of The Top 25 Schools Where Students Held The Most Student-Loan Debt In 2014.“A new report from the Brookings Institution shows that for-profit colleges aren’t just part of the student-loan crisis—they’re a disproportionately large segment, and one that has swelled in recent years. Between 2000 and 2014, the number of students holding education debt doubled to 42 million, their total debt outstanding quadrupling to over $1 trillion. In 2000, there was only one for-profit institution among the 25 colleges and universities where students held the most student-loan debt. In 2014, there were 13, and University of Phoenix topped the list. The amount of debt owed by those attending for-profit colleges has grown from $39 billion in 2000 to $229 billion in 2014—which is more attributable to increases in the rate of borrowing at those schools than to increases in enrollment.” [Gillian B. White, “The Empty Promises of For-Profit Colleges,” The Atlantic, 09/15/15]

Principal Deputy Under Secretary Diane Auer Jones: Trump’s Top Higher Education Official Is A Former For-Profit Lobbyist

Diane Auer Jones, The Trump Administration’s “Top Higher Education Official,” Spent Nearly Five Years Lobbying For A For-Profit College Corporation That Drew The Fire Of Federal And State Regulators For Deceiving Students.

Career Education Corporation “Is One Of The Largest For-Profit Education Companies” That “Has Been Under Near Constant Scrutiny From Accreditors And Law Enforcement Entities.”“Career Education Corporation (‘CEC’) is one of the largest for-profit education companies offering many types of programs from certificate to Bachelor’s degrees. Like many for-profit education companies, in recent years CEC has experienced significant growth in student enrollment, Federal funds collected, and profit realized. At the same time, the company has been under near constant scrutiny from accreditors and law enforcement entities.” [“For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success,” U.S. Senate Health, Education, Labor and Pensions Committee, 07/30/12]

Chief Enforcement Officer Julian Schmoke: “Akin To Nominating Influenza To Be The Surgeon General”

Julian Schmoke Was An Executive At DeVry University, A For-Profit College That Has Settled Allegations Of Deceptive Tactics With Federal Regulators

DeVry University Is A For-Profit College That “Has Faced Allegations That It Was Using Deceptive Recruitment Tactics, Misleading Students About Their Career Prospects, And Distorting Data Provided To The Federal Government.”“DeVry, a for-profit college, has faced allegations that it was using deceptive recruitment tactics, misleading students about their career prospects, and distorting data provided to the federal government. The institution’s parent company arrived at settlements with several government entities, including the New York attorney general earlier this year and the Federal Trade Commission in late 2016, the latter of which amounted to $100 million. DeVry Education Group, the parent company, subsequently rebranded itself as Adtalem Global Education.” [Alia Wong, “What a New Trump Administration Hire Could Mean for For-Profit Colleges,” The Atlantic, 08/31/17]

Senior Counselor Robert Eitel: Industry’s Man On The Inside

Robert Eitel Worked At The Department Of Education For Two Months After Trump’s Inauguration While On A Leave Of Absence From A Troubled For-Profit College Company.

Robert Eitel Was On The Trump “Beachhead Team” And Started Working For Betsy DeVos At The Department Of Education While On A Leave Of Absence From For-Profit Bridgepoint Education.

  • Bridgepoint Education Owns For-Profit Colleges Which Have Been “Accused Of Pressuring Students To Enroll In Schools They Can’t Afford.”“Bridgepoint Education, which owns Ashford University, and other for-profit colleges have been accused of pressuring students to enroll in schools they can’t afford and aren’t prepared for so the schools can collect federal and state financial aid money in the name of boosting profit margins. The result, critics say: Shareholders and executives get rich at the expense of taxpayers, while many students drop out, deep in debt.” [Staci Hupp, “For-profit colleges: Too much profit, too little education?” Des Moines Register, 06/05/11]

Before Working At Bridgepoint, Robert Eitel Worked At Career Education Corporation, A For-Profit College CompanyThat Drew The Fire Of Federal And State Regulators For Deceiving Students.

Robert Eitel “Remained Employed By Bridgepoint Education” For Two Months After Starting At The Department Of Education In 2017.“Among DeVos’ closest advisers is senior counselor Robert Eitel, a former vice president at two for-profit college operators. For two months, as the department made decisions affecting for-profits, Eitel remained employed by Bridgepoint Education, a for-profit where he was an attorney for regulatory legal services. Straddling both roles, Eitel worked on rewriting the so-called borrower defense to repayment regulations that make it easier for students to file for debt relief that was beneficial to his employer.” [Heidi Przybyla, “DeVos goes deep with anti-regulatory mission at Education Department,” NBC News, 07/03/18]

Bridgepoint Education “Has Come Under Frequent Scrutiny By Federal And State Watchdogs,” Including The Justice Department.

Bridgepoint Education “Has Come Under Frequent Scrutiny By Federal And State Watchdogs.” “Bridgepoint — a publicly traded company that operates Ashford University and University of the Rockies, enrolls roughly 50,000 students, and primarily offers online degrees — has come under frequent scrutiny by federal and state watchdogs.” [Patricia Cohen, “Betsy DeVos’s Hiring of For-Profit College Official Raises Impartiality Issues,” The New York Times, 03/17/18]

  • As Recently As March 2018, The Justice Department Was “Investigating Whether The Company Violated Education Department Limits That Bar It From Receiving More Than 90 Percent Of Its Revenue In Federal Student Aid.”“The Justice Department, according to a Bridgepoint filing with the Securities and Exchange Commission, is investigating whether the company violated Education Department limits that bar it from receiving more than 90 percent of its revenue in federal student aid. If a college is in violation for two years in a row, the Education Department can cut off further access to funds, the college’s lifeblood.” [Patricia Cohen, “Betsy DeVos’s Hiring of For-Profit College Official Raises Impartiality Issues,” The New York Times, 03/17/18]

The Security Exchange Commission Is Also Investigating Bridgepoint’s Accounting Practices.

As Recently As March 2018, The SEC Was “Investigating Bridgepoint’s Accounting Practices.”“In addition, the S.E.C. itself has been investigating Bridgepoint’s accounting practices. Attorneys general in California and Massachusetts are conducting separate investigations. And last month, Ashford received a final audit from the Education Department that said the company owed the agency $300,000 as a result of the university’s miscalculation of federal student aid eligibility dating to 2006, an S.E.C. filing noted. The university has 45 days to appeal.” [Patricia Cohen, “Betsy DeVos’s Hiring of For-Profit College Official Raises Impartiality Issues,” The New York Times, 03/17/18]

Institute Of Education Sciences Director Mark Schneider: For-Profit Consultant Managing ED’s Policy Research

Mark Schneider Is In Charge Of The Research Informing The U.S. Department Of Education’s (ED’s) Policies—And Has Previously Consulted For-Profit Colleges.

Mark Schneider Worked As An “Individual Independent Consultant” For The “Association Of Proprietary Colleges.”Mark Schneider worked as an “Individual Independent Consultant” for the “Association of Proprietary Colleges.” [“Mark Schneider,” Pro Publica, accessed 06/05/19]

  • The Association Of Proprietary Colleges “Represents 12 For-Profit Institutions.” The “Association of Proprietary Colleges […] represents 12 for-profit institutions in New York.” [Ashley A. Smith, “N.Y. For-Profits Get Piece of Scholarship Pie,” Inside Higher Ed, 04/03/18]

Mark Schneider Worked As An “Individual Independent Consultant” For “Monroe College.” Mark Schneider worked as an “Individual Independent Consultant” for “Monroe College.” [“Mark Schneider,” Pro Publica, accessed 06/05/19]

Senior Counsel Brandon Sherman: Represented For-Profit Colleges And Now Betsy DeVos

Brandon Sherman, One Of Betsy DeVos’ Top Lawyers, Previously Provided Legal Services To Numerous For-Profit Colleges.

Deputy General Counsel Jed Brinton: For-Profit Industry Alum

Jed Brinton, One Of ED’s Top Attorneys, Previously Worked For AmeriTech, A For-Profit College.

  • “AmeriTech College Is A “Private, For-Profit College.” “Headquartered near Salt Lake City, Utah, AmeriTech is a private, for-profit college focused on providing healthcare training programs such as nursing, medical assisting, medical billing and coding, surgical technicians, and dental assisting.” [“Main Street Capital Invests in AmeriTech College,” The PE Hub Network, 03/14/12]

###

Close

Join The Fight!

We need your help to hold powerful special interests accountable and empower hardworking Americans. Join our fight today!