Ed department blames accreditation for Dream Center collapse


The world of higher education accreditation is obscure, obtuse, even Byzantine. But it matters.

For students, that means earning credits that can be transferred to another college and a degree that has value in the workplace. For colleges, that means eligibility for federal student aid – usually the difference between staying open or closing.

In the case of Dream Center Education Holdings, the loss of accreditation of only two out of dozens of colleges contributed to the collapse of the whole company, prompting tens of thousands of students to seek hundreds of millions of dollars in loan forgiveness from the US Department of Education and the private company that took over the assets of the Dream Center.

But the question of who is responsible for this disaster has become a complex political blame game between the Education Department and the accreditation agency that oversaw these two colleges, the Higher Education Commission.

The dispute will be released to the public later this month, when the accreditation meets with ministry officials at a meeting of the National Advisory Committee on Institutional Quality and Integrity. A recently released ministerial report, which appears to have been compiled by politician appointees rather than career staff, recommends penalizing accreditation by banning it from accepting new member candidates for a year.

The advisory committee can vote to support or oppose the recommendation. But a senior official in the department, a political appointee, has the final say and will likely approve the sanction.

How we got here

When the Dream Center sought to buy the art institutes and two other for-profit chains from another company in 2017, it had to get approval from the education department and half a dozen accreditation agencies, including the Higher Education Commission, which accredits colleges. in 19 states.

As a condition of approving this sale, the Higher Education Commission placed two of the Art Institute’s colleges, which were previously accredited, in “candidacy” status – meaning their students could not. not use federal student aid on these campuses. The Commission public disclosure, from January 2018, explained the consequences for colleges and their students, and explained that “during application status, an institution is not accredited”.

This was just one of the myriad financial issues facing the Dream Center and by early 2019 the company was drowning in debt and shutting down all of its campuses. While many experts had raised questions about the structure of the company and its chances of success, the extent of the dysfunction became painfully clear thereafter.

While accreditation had repeatedly informed the company of the loss of accreditation, the Department of Education continued to provide federal assistance to these campuses, according to the findings of a congressional inquiry.

Worse yet, the students accused of not being informed that the colleges had lost their accreditation and ultimately filed a complaint against the ministry having its student loans canceled.

Who is to blame

The education department finally accepted to cancel part of the federal student loans of some 1,500 students on the two campuses of the Art Institute. But ministry officials continue to wrestle with the accreditation agency over who is to blame for the debacle, much of the interest apparently aroused by those appointed by the ministry.

Announcing the agreement to forgive certain student loans in November, Education Secretary Betsy DeVos said that “students have been harmed” by the Higher Education Commission decision to shut down campuses. of the Art Institute in candidacy status.

Since October, Assistant Secretary of Post-Secondary Education Robert King has helped conduct an in-depth investigation into the accreditation decision-making process that included reviewing emails between the commission and the Dream Center and interviews with the advisor. company legal and even a former employee. of the commission.

A staff report, usually written for the advisory board by a member of the ministry’s accreditation group, has been replaced by a formal letter of findings signed by Annmarie Weisman, senior director of development, analysis and review services. policy accreditation.

The ministry’s conclusions: When the commission approved the sale of the art institutes to the Dream Center, it was not explicit in telling the new owners that the candidacy status meant the colleges could not receive federal aid to students, says the ministry.

“This all reads very politically,” said Clare McCann, federal higher education policy expert with think tank New America. “This is the department that is trying to cover its actions on the Dream Center and for the company that has been lying about its accreditation status for months,” she said.

McCann says it’s hard to believe anyone who runs a university and his lawyers didn’t get this. “The lawyers at the Dream Center might not read the fine print,” she said, “but they should have understood what the candidacy means.”

The ministry’s report also argues that the colleges should have been given the opportunity to appeal the accreditation’s decision to nominate the colleges.

“This situation does not concern the ministry; these are the thousands of students who have been injured by an accreditor who did not follow their own procedures or our regulations, ”said a written statement from Angela Morabito, a spokesperson for the department. “The ministry needs to hold all accreditors accountable when they make mistakes that harm students and taxpayers,” she said.

The commission’s response, noted in the report, is that the company agreed to the terms of the change in ownership – it could only have appealed the decision if the accreditation had rejected the sale.

All of this will be debated ad nauseam at the meeting of the National Advisory Committee on Institutional Quality and Integrity, where there will likely be a lengthy debate on a vote that will have little influence on the outcome of the case.

In a prepared statement, Accreditation responded that it “welcomes the opportunity for open dialogue” to explain how it “has followed federal regulations and our policies as we act within our authority and with the best interests of the students at all times. . “

One explanation will not suffice. In addition to prohibiting any new institution from applying to become a member of the commission, the accreditor must submit a compliance report on how it will help students who have been wronged by its decision in the Dream Center, “in particular with regard to academic status. credits earned in institutions during the calendar year 2018. “

In addition, the commission must accept the department’s ultimatum that it made the wrong decision. “The ministry continues to believe that because of the” procedural shortcomings of accreditation “, its actions to move the institutions to the status of candidacy are void,” said the letter from the ministry. The commission “must take action to remedy this problem and recognize the ministry’s interpretation of events before the ministry’s concerns are allayed.”

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