DeVos Must Fire Aid Who Lied to Congress About Accreditation Scandal

Senior DeVos Aide Diane Auer Jones Feigned Ignorance About Unaccredited For-Profit College Campuses Illegally Receiving Federal Student Aid – The Record Shows She Lied To Congress

Washington D.C. – The Trump-DeVos Education Department’s Dream Center accreditation scandal is somehow worse than originally thought. It was first reported in July that top DeVos aide Diane Auer Jones ‘pulled strings’ to regain accreditation for a chain of subpar for-profit colleges just long enough to cheat thousands of students out of their tuition money with no degree to show for it. Now documents released by the House Education and Labor Committee this week show administration officials, including those under Auer Jones, knowingly approved nearly $11 million in loans and grants to students to attend Dream Center-run colleges despite lacking federal accreditation, a legal requirement for for-profit colleges to access federal student aid programs.

In July 2019, Auer Jones, a long-time for-profit college industry lobbyist, apparently lied under oath to Congress when she testified that the Education Department believed two now-defunct Dream Center campuses were accredited at the time the Education Department approved student aid to be disbursed. ED staff emails show the opposite, including a mad scramble to find a loophole to make the aid distribution “legal.” They desperately gave the failing schools retroactive, temporary “non-profit” status in hopes no one would they’d failed to meet the legal requirements for months. See background below.

Consumer watchdog group Allied Progress called for Secretary Betsy DeVos to immediately dismiss Auer Jones’ before she allows any more students to be taken advantage of by her friends in the shady for-profit industry.

“Betsy DeVos’ decision to put a lobbyist in charge of regulating the industry she previously worked for was destined for disaster – and sure enough, Diane Auer Jones failed to meet even the lowest of expectations,”said Derek Martin, Director of Allied Progress. “It was bad enough Auer Jones moved heaven and earth so that a diploma mill could continue depriving student borrowers of the quality education they paid for. But she knowingly stepped over the law to do it, and then lied to Congress to cover it up.  This is the same DeVos official that buried nearly 160,000 backlogged borrower defense claims to the benefit of her industry pals. That Auer Jones is still making any decisions that impact students is an indictment of how irresponsibly Secretary DeVos is running her department. Secretary DeVos needs to get her house in order before any more student abuses are swept under the rug. Diane Auer Jones needs to go.”

WHAT YOU NEED TO KNOW:

Diane Auer Jones Lied To Congress About What And When Her Office Knew About Accreditation Problems Surrounding Two For-Profit Colleges She Helped Prop-Up With Access To Federal Student Loan Money.

The House Education And Labor Committee Has Revealed The Education Department (ED) Gave Almost $11 Million In Federal Student Aid To Unaccredited For-Profit Colleges Who Were Ineligible To Receive Such Aid.

The House Education And Labor Committee Revealed ED Provided $10.7 Million In Federal Student Aid To Students At Unaccredited For-Profit Schools Despite Officials Knowing The Schools Were “Ineligible To Receive Such Aid.”

On October 22, 2019, The House Education And Labor Committee Released “A Trove Of Documents” Revealing ED Provided $10.7 Million In Federal Student Aid To Students At For-Profit Schools Despite Knowing They “Were Not Accredited And Ineligible To Receive Such Aid.” “A trove of documents released Tuesday by the House Education and Labor Committee shows the Education Department provided $10.7 million in federal loans and grants to students at the Illinois Institute of Art and the Art Institute of Colorado even though officials knew the for-profit colleges were not accredited and ineligible to receive such aid.” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

In January 2018, The Accreditor Of Several Dream Center Schools Was Concerned “About the Quality Of Education” At Some Campuses And Downgraded Those Schools To “Preaccredited” Status, Meaning They Were No Longer Accredited.

After Reviewing The Dream Center’s Acquisition Of A For-Profit College Chain, Their Accreditor Was Concerned “About The Quality Of Education” And “Downgraded Their Status” To “‘Preaccredited.’”

Dream Center’s Accreditor “Raised Concerns About The Quality Of Education At The Campuses And Downgraded Their Status” To Preaccredited After Reviewing Their Acquisition Of The For-Profit Chain. “In reviewing Dream Center’s 2017 acquisition of the chain, the accrediting commission raised concerns about the quality of education at the campuses and downgraded their status for up to four years […] “The for-profit schools’ downgraded designation as ‘preaccredited’ institutions.” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

In January 2018, The School’s Accreditor “Issued A Public Notice” That The Schools’ Accreditation Status Had Changed.

In January 2018, The Schools’ Accreditor “Issued A Public Notice” That The Schools’ Accreditation Status Had Changed. “The accreditor issued a public notice in January 2018 and instructed Dream Center to inform students [that the school had been downgraded to pre-accredited status.]” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

For-Profit Colleges Must Be Accredited To Access Federal Student Aid, Yet The Dream Center’s Unaccredited Campuses Kept Advertising That They Had Accreditation And ED Continued Granting Them Loans.

For-Profit Schools “Must Be Fully Accredited” To Receive Federal Student Aid But The Art Institute Of Colorado, The Art Institute Of Michigan, And The Illinois Institute Of Art In Chicago And Schaumburg Were Not Accredited “In The 2018 Spring Semester.”

For-Profit Schools “Must Be Fully Accredited To Participate In Federal Student Aid Programs” And “Neither The Art Institute Of Colorado, The Art Institute Of Michigan Or The Illinois Institute Of Art In Chicago And Schaumburg” Were Not Accredited “In The 2018 Spring Semester.” “By law, for-profit colleges must be fully accredited to participate in federal student aid programs. Neither the Art Institute of Colorado, the Art Institute of Michigan or the Illinois Institute of Art in Chicago and Schaumburg held that seal of approval from their accreditor, the Higher Learning Commission, in the 2018 spring semester.” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

The Schools’ Accreditor “Instructed” Dream Center To Tell Students About Their Loss Of Accreditation But The Company Continued Advertising That These Campuses Were Accredited And ED “Kept Giving Them Federal Loans.”

The Accreditor “Instructed Dream Center To Inform Students” About The Change In Their Accreditation Status But The “Company Continued To Advertise That The Schools Were Accredited” And “The Education Department Kept Giving Them Federal Loans.” The Accreditor “instructed Dream Center to inform students [about their change in accreditation status,] but the Los Angeles company continued to advertise that the schools were accredited. Students kept enrolling, and the Education Department kept giving them federal loans, despite the schools’ ineligibility. Dream Center, which has since folded, could not be reached for comment.” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

In May 2018, ED Official Michael Frola Acknowledged That The Unaccredited For-Profit Schools Were Ineligible For Federal Student Aid And Informed The Schools That ED Would Grant Them Retroactive And Temporary Nonprofit Status.

In A May 2018 Letter, FSA Official Michael Frola Informed The Interim President Of The Illinois Art Institute That ED Learned “HLC Transitioned The Art Institute From Being Accredited” To “A Candidate For Accreditation” As Of January 20, 2018.

In A May 2018 Letter, Federal Student Aid Official Michael Frola Informed The Interim President Of The Illinois Art Institute That “The Department Has Learned That HLC Transitioned The Art Institute From Being Accredited To Being A Candidate For Accreditation Effective January 20, 2018.” “With regard to accreditation approval, however, the Department has learned that HLC transitioned the Art Institute from being accredited to being a candidate for accreditation effective January 20, 2018. In particular, HLC imposed ‘Change of Control-Candidacy” status on the institution as of the January 20, 2018 close of its sale by Education Management Corporation (“EDMC”) to the Dream Center Foundation (“DCF”) through Dream Center Education Holdings (“DCEH”).  According to HLC, the period of Change of Control-Candidacy status can last from a minimum of six months to a maximum or four years.” [Exhibit 2, Letter from Chairman Bobby Scott to Secretary Betsy DeVos, Committee on Education and Labor, 10/22/19]

  • Exhibit 2, A Letter From Michael Frola, The Division Director Of Multi-Regional And Foreign School Participation Division, To David Ray, The Interim President Of The Illinois Institute Of Art, Was Dated “May 3, 2018” And Sent “RE” Interim Decision On Change Of Ownership And Conversion To Nonprofit Status.” [Exhibit 2, Letter from Chairman Bobby Scott to Secretary Betsy DeVos, Committee on Education and Labor, 10/22/19]

Frola Explained That Their Loss Of Accreditation Precluded The Art Institute From Federal Student Aid.

Frola Explained That “Due To This Accreditation Status, The Art Institute No Longer Qualifies As An Eligible Institution To Participate In The Title IV.” “The provisions of 34 C.F.R. 600.5(a)(6) require a proprietary institution of higher education to be fully accredited to qualify as an eligible institution for purposes of the Title IV, HEA programs, and do not allow for pre-accredited (or candidacy) status. […] Due to this accreditation status, the Art Institute no longer qualifies as an eligible institution to participate in the Title IV, HEA programs as a for-profit institution.” [Exhibit 2, Letter from Chairman Bobby Scott to Secretary Betsy DeVos, Committee on Education and Labor, 10/22/19]

Frola Then Stated That “To Avoid The Lapse Of Eligibility” ED Would Grant The School Temporary Non-Profit Status Retroactively As Of January 20, 2018.

Frola Then Clarified That “To Avoid The Lapse Of Eligibility” ED Would Grant The School “Temporary Interim Non-Profit Status” As Of January 20, 2018. “The provisions of 34 C.F.R. 600.4(a)(5)(i) do, however, allow a private nonprofit institution lo qualify as an eligible Title IV institution with preaccredited (candidacy) status. […] To avoid the lapse of eligibility, and given the pending application for the change of ownership that includes a requested conversion to non-profit status, the Department is granting the institution temporary interim non-profit status during the review of the pending change of ownership application, to the Art Institute, effective January 20, 20 I 8. The Department will continue the Temporary PPA on a month to month basis until the Department makes a final determination on the application.” [Exhibit 2, Letter from Chairman Bobby Scott to Secretary Betsy DeVos, Committee on Education and Labor, 10/22/19]

Yet, In May 2019, Ed Official Diane Auer Jones Testified To Congress That It Was “The Department’s Position” That The Schools Were Accredited When Loans Were Granted And Said That, Otherwise, The Schools Could Not Have Accessed Federal Student Aid.

In May 2019, ED Official Diane Auer Jones, Testified Before A House Oversight Subcommittee That It Was “The Department’s Position” That The Art Institute Of Chicago [sic] And Illinois Institute Of Art Were Accredited When Loans Were Granted Between January 2018 And December 2018 Because, “Otherwise, The Schools Could Not Have Participated In Title IV Programs.”

In May 2019, Diane Auer Jones, An ED Principal Deputy Under Secretary, Testified Before The House Oversight And Reform Subcommittee On Economic And Consumer Policy That It Was “The Department’s Position” That The Art Institute Of Chicago [sic] And Illinois Institute Of Art Were Accredited Between January 2018 And December 2018 Because, “Otherwise, The Schools Could Not Have Participated In Title IV Programs.” Diane Auer Jones: The Department is reviewing all of the circumstances of the recent closures. And, in particular, the circumstances surrounding the Art Institute of Chicago and the Illinois Institute of Art. Let me be clear that it is the Department’s position that those schools were accredited throughout the period between the change of control in January and the closure in December 2018. Otherwise, the schools could not have participated in Title IV programs. We will continue to work with students who were a part of the school closures and if those students have questions, they should contact Federal Student Aid.” [“Examining For-Profit College Oversight and Student Debt,” YouTube, 05/22/19 02:10:10]

  • “Diane Auer Jones Is The Principal Deputy Under Secretary, Delegated The Duties Of The Under Secretary And Assistant Secretary For Post-Secondary Education At The U.S. Department Of Education.” [“Diane Auer Jones, Principal Deputy Under Secretary — Biography,” U.S. Department of Education, accessed 10/23/19]
  • Diane Auer Jones Was A Witness At A House Oversight Economic And Consumer Policy Subcommittee Hearing On “Examining For-Profit College Oversight and Student Debt” On May 22, 2019. [“Examining For-Profit College Oversight and Student Debt,” Committee On Oversight And Reform, accessed 10/23/19]

In Response To The Revelations, Former Students Are Suing DeVos And ED For “Unlawfully Issuing Loans” And House Education Chairman Bobby Scott Is Threatening To Subpoena DeVos For More Documents On ED’s Role.

Former Art Institute Students Are Suing DeVos And ED “Accusing Them Of Unlawfully Issuing Loans The Students Say They Should Not Be Forced To Repay.”

Former Students Are Suing DeVos And ED “Accusing Them Of Unlawfully Issuing Loans The Students Say They Should Not Be Forced To Repay.” “Former Art Institute of Colorado and Illinois Institute of Art students are suing DeVos and the Education Department, accusing them of unlawfully issuing loans the students say they should not be forced to repay. The National Student Legal Defense Network, a legal aid group representing the students, used many of the documents unearthed by House Democrats as evidence in the complaint.” .” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

Chairman Bobby Scott (D-VA) Is “Threatening To Subpoena” Devos For More Documents Related To The Department’s Role In Dream Center’s Actions.”

Chairman Bobby Scott (D-VA) Is “Threatening To Subpoena Education Secretary Betsy Devos For More Documents Related To The Department’s Role In Dream Center’s Actions.” “Rep. Robert C. “Bobby” Scott (D-Va.), chairman of the House Education Committee, is threatening to subpoena Education Secretary Betsy DeVos for more documents related to the department’s role in Dream Center’s actions. Scott says the agency has obstructed the committee’s investigation and refused to answer questions, as emails and letters paint a picture of a federal agency complicit in an effort to place profits before students.” [Danielle Douglas-Gabriel, “Trump administration let nearly $11 million in student aid go to unaccredited for-profit colleges,” The Washington Post, 10/22/19]

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