The world of higher education accreditation is arcane, obtuse, byzantine even. But it matters.
For students, it means earning credits that can be transferred to another college and a credential that has value in the workplace. For colleges, it means eligibility for federal student aid — usually the difference between staying open or shutting down.
In the case of the Dream Center Education Holdings, the loss of accreditation of just two, out of dozens, of colleges helped lead to the collapse of the entire company, causing tens of thousands of students to seek hundreds of millions of dollars of loan forgiveness from the U.S. Department of Education and the private company that took over the Dream Center’s assets.
But the question of who is at fault for that disaster has become a complex political blame game between the Education Department and the accrediting agency that oversaw those two colleges, the Higher Learning Commission.
The dispute will air in public later this month, when the accreditor will face department officials at a meeting of the National Advisory Committee on Institutional Quality and Integrity. A newly released department report, which appears to have been compiled by political appointees rather than career staff, recommends penalizing the accreditor by prohibiting it from accepting any new member candidates for a year.
The advisory committee can vote to support or oppose the recommendation. But a senior department official, a political appointee, has the final say, and is likely to approve the sanction.
How We Got Here
When the Dream Center sought to buy the Art Institutes and two other chains of for-profits from another company in 2017, it had to get approval from the Education Department and a half-dozen accrediting agencies, including the Higher Learning Commission, which accredits colleges in 19 states.
As a condition of approving that sale, the Higher Learning Commission placed two of the Art Institute colleges, which were previously accredited, into “candidacy” status — meaning their students could not use federal student aid at those campuses. The commission’s public disclosure, from January 2018, spelled out the consequences for the colleges and their students, and explained that “during candidacy status, an institution is not accredited.”
That was just one of myriad financial problems facing the Dream Center, and by early 2019, the company was drowning in debt and shut down all of its campuses. While numerous experts had raised questions about the company’s structure and likelihood of success, the extent of the dysfunction became painfully clear in the aftermath.
While the accreditor had on several occasions informed the company about the loss of accreditation, the Education Department continued to disburse federal aid to those campuses, according to the findings of a Congressional investigation.
Worse, students charged that they were not told the colleges had lost accreditation and eventually filed a lawsuit against the department to have their student loans forgiven.
Who’s to Blame
The Education Department eventually agreed to forgive a portion of the federal student loans of some 1,500 students at the two Art Institute campuses. But department officials continue to battle with the accrediting agency over whose fault it is for the debacle, much of the interest seemingly driven by the department’s political appointees.
In announcing the agreement to forgive some student loans, in November, Education Secretary Betsy DeVos said “students had been harmed” by the Higher Learning Commission’s decision to put the Art Institute campuses into candidacy status.
Since October, the assistant secretary for postsecondary education, Robert King, has helped lead an extensive inquiry into the accreditor’s decision-making process that has included reviewing emails between the commission and the Dream Center and interviews with the company’s legal counsel and even a former employee of the commission.
A staff report, usually written for the advisory committee by a member of the department’s accreditation group, has been replaced with a formal letter of findings signed by Annmarie Weisman, the senior director for policy development, analysis, and accreditation services.
The department’s conclusions: When the commission approved the sale of the Art Institutes to the Dream Center, they were not explicit in telling the new owners that candidacy status meant the colleges could not receive federal student aid, the department argues.
“This all reads very politically,” said Clare McCann, an expert in federal higher-education policy at the think tank New America. “This is the department trying to cover up for its actions on the Dream Center and for the company which lied about its accreditation status for months,” she said.
McCann says it’s hard to believe that anyone leading a college and their lawyers didn’t understand this. “The Dream Center’s lawyers maybe weren’t reading the fine print,” she said, “but they should have understood what candidacy means.”
The department report also argues that the colleges should have had a chance to appeal the accreditor’s decision to put the colleges into candidacy status.
“This situation is not about the department; it is about the thousands of students who were harmed by an accreditor that did not follow its own procedures or our regulations,” said a written statement from Angela Morabito, a spokeswoman for the department. “The department must 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 of ownership — they could only have appealed the decision if the accreditor rejected the sale.
All of this will be hashed out ad nauseam at the National Advisory Committee on Institutional Quality and Integrity meeting, where there is likely to be extended debate on a vote that will have little influence on the outcome of the matter.
In a prepared statement, the accreditor responded it “welcomes the chance for an open dialogue” to explain how it “followed federal regulations and our policies as we acted within the scope of our authority and with the best interest of students in mind at all times.”
One explanation will not be enough. In addition to prohibiting any new institutions from seeking membership with the commission, the accreditor must submit a compliance report on the ways that it will help any students that were harmed by its decision in the Dream Center, “especially with regard to the status of academic credits earned at the institutions during calendar year 2018.”
More than that, the commission must accept the department’s ultimatum that it made the wrong decision. “The department continues to believe that because of” the accreditor’s “procedural deficiencies that its actions in moving the institutions to candidacy status are void,” says the letter from the department. The commission “must take action to rectify this issue and recognize the department’s interpretation of the events before the department’s concerns will be allayed.”
