In recently released documents, an accreditor argues that leaders of a for-profit-college company and the U.S. Education Department could have acted sooner to protect students from taking out loans at unaccredited colleges. Instead, senior political appointees in the Education Department waited months to take action, according to the documents, and then pressured the accrediting commission to retroactively accredit the colleges.
In particular, the Higher Learning Commission, the accreditor, singles out Diane Auer Jones, principal deputy undersecretary, and a former lobbyist for proprietary colleges. Jones pressed the commission to change its policies and retroactively accredit the colleges — in apparent contradiction of her testimony to Congress in May 2019, the commission charges.
But in a report to a federal advisory committee, the Education Department says the commission did not follow federal regulations after it approved the sale of two Art Institutes to Dream Center Education Holdings in January 2018. The commission approved the sale with the condition that the colleges be moved from accredited status to candidates for accreditation — meaning their students were no longer eligible for federal financial aid.
The allegations from the department and the accreditor are scheduled to be discussed on Wednesday at a meeting of the National Advisory Committee on Institutional Quality and Integrity. The committee will weigh whether to support or oppose the department’s recommendation to punish the commission by prohibiting the accreditor from accepting any new candidates for accreditation for a year. The final decision on the sanction is up to a department official.
“This is a blatantly political attempt to blame Diane Jones for the actions of the Higher Learning Commission,” said Angela Morabito, a department spokeswoman. Jones “acted appropriately to protect students who had been told they were enrolled at accredited institutions,” she said.
The commission declined to comment.
Accreditation experts say the department is misusing its authority to cover up its own mistakes.
The accreditor’s decision-making wasn’t perfect, said Ben Miller, vice president for postsecondary education at the Center for American Progress. “But it is the Education Department and its political leadership that should be answering questions about its involvement with Dream Center,” he said.
Belle S. Wheelan, president of another accrediting agency, the Southern Association of Colleges and Schools Commission on Colleges, known as Sacs-COC, says the department’s efforts to punish the accreditor set a troubling precedent. Just as accreditors shouldn’t use their authority “to force an institution to go back in time and reverse action; I believe the department’s authority should not be used in such a manner either,” Wheelan said in a written statement.
A Sale With Strict Conditions
The commission’s explanation for the situation is contained in a November 2019 letter responding to 21 lengthy questions the department had posed a month earlier. The documents are two of several filed to support a lawsuit against the department by the National Student Legal Defense Network.
The dispute, however, had begun two years earlier when the commission was one of several accreditors to consider the sale of dozens of colleges from the Education Management Corporation to the newly formed Dream Center Education Holdings.
In mid-November 2017, the commission sent its terms for approving the sale to the Dream Center, including the provision that two of the colleges in the commission’s region would be demoted to candidates for accreditation until they could show they were stable financially. Two officials at the Education Department also received a copy, according to the commission.
The accreditor, the Higher Learning Commission, was concerned about the new company’s lack of experience, the commission said. But it approved the sale with strict conditions “to permit an unproven, inexperienced entity the opportunity, if it was willing, to prove its ability to properly manage institutions of higher education,” the accreditor wrote.
The Dream Center took until January 2018, nearly six weeks, to agree to the accreditor’s terms, and questioned several parts of its decision, the accreditor wrote. But “remarkably” the company had never questioned the two colleges’ demotion to unaccredited, commission officials wrote.
Not until early February 2018, after the Dream Center’s outside lawyers raised questions about the colleges’ lack of accreditation, did federal officials show any concern about the situation, the commission said.
A phone call between the accreditor and the department didn’t take place until March 2018 — two months after the company had formally agreed to the commission’s terms for the sale. On the call, the commission wrote, department officials seemed confused about the difference between candidacy and accreditation, the commission said.
Responding to the possibility of a lawsuit, the commission’s outside lawyer “made attempts to contact the parties’ counsel, but they did not respond to the outreach,” the commission wrote. “As such, it appeared” to the commission that the Dream Center “did not wish to communicate further about the matter.”
While the commission’s efforts to communicate with the colleges and their lawyers seemed to go nowhere, the department had finally begun to take action, though it had not stopped the flow of student aid.
Instead, in May the department granted the colleges “temporary interim nonprofit status” — under federal law, nonprofit colleges that are candidates for accreditation can receive federal student aid.
In late June, Jones, deputy principal undersecretary at the department, had begun discussing the possibility of retroactive accreditation with the commission — allowing the accreditor to backdate the date of accreditation to January if the colleges met the commission’s standards. And she told the commission that the department would send a letter assuring them that such a policy change would not run afoul of federal regulations, the accreditor wrote.
“This is at odds with the implications of what Jones indicated in her Congressional testimony in May 2019, when she said that ‘somebody from HLC called me to ask me about retroactive accreditation,’” the commission wrote. “To be clear,” the accreditor continues, the commission “did not initiate contact with Jones on this issue. Rather, Jones initiated the conversation.”
Calls and Letters
Throughout the summer, as the Dream Center’s financial problems worsened, Jones continued to press the commission to change its policy and allow retroactive accreditation. By fall, the pressure included a letter that the commission’s leaders found troubling.
Late in October, Jones made several calls to Barbara Gellman-Danley, president of the Higher Learning Commission, saying she “had identified a way” for the commission to retroactively accredit the Art Institutes and would be sending a letter indicating that such a decision “would not be problematic” to the department, the commission wrote.
Instead, two days later, on the eve of the commission’s board meeting, Jones sent a five-page letter questioning the legitimacy of the commission’s processes and accusing the commission of failing to provide due process for the Art Institutes.
Later that evening, Jones twice called Gellman-Danley, the commission wrote, and “suggested that perhaps the board could rescind its November 2017 action entirely, and place the Institutes on a sanction or issue a show-cause order,” according to the commission.
The commission’s president “expressed deep concerns that the letter was both inaccurate and highly inappropriate in terms of timing,” according to the accreditor’s account. Jones said that “the letter was certainly full of language that lawyers would use,” according to the commission and that “no one else, other than herself and ‘the lawyers’ had seen the letter, and that it would be retracted,” though Gellman-Danley had not asked for any retraction.
That seemed to end the imbroglio between the department and the accreditor until October 2019, when department officials began a deeper inquiry into the commission. The review by the advisory committee will probably be lengthy, but their vote will have little impact on the decision of the department.
Critics of the department say the review should include the actions of Jones and other officials who allowed federal aid to go to two unaccredited colleges.
“As a longstanding member of the accrediting community, I am troubled by the department’s approach that appears to pressure an accreditor to undo prior action,” said Wheelan, president of the Sacs-COC.
“We hold our membership responsible for reading our letters, understanding our policies, and asking questions if they do not understand them,” she said. “We cannot place blame on accreditors if institutions fail to do so.”
Clare McCann, deputy director for federal higher-education policy at the think tank New America, said the department’s inquiry into the commission amounts to an attempt to shift blame for the failures of the federal agency.
“This proceeding today is little more than the department’s cover-up,” she said.
