Sparring continues in D.C. over collapse of Art Institutes
WASHINGTON — More than a year after the Art Institutes’ collapse, a dispute has heated up between the Trump administration and Democrats in Congress over who is to blame for the displacement of thousands of students across the country and student loan defaults that could cost taxpayers up to $1 billion.
On Wednesday, U.S. Department of Education staff presented their case to punish the accreditation body that removed its seal of approval from four Art Institute schools in early 2018. Department staff claimed, at an advisory committee meeting, the Higher Learning Commission did not properly notify the schools and ultimately played a role in the
Pittsburgh-based college chain’s demise. HLC officials denied any responsibility and said they followed the rules.
In a repudiation of the staff report, the Republican-led advisory committee — a group of education officials that oversee accreditation — voted 9-3 Wednesday to recommend the department reject the staff report and continue recognizing the HLC. Education Secretary Betsy DeVos makes the final decision.
The meeting came one day after House Democrats published a report that accused the Trump administration of failing to protect Art Institute students.
The report — published following a yearlong investigation that reviewed nearly 1,600 pages of supporting documents
— provides fresh evidence Dream Center Education Holdings, the Art Institute’s owners, knowingly deceived students about the loss of accreditation. It also purports to show the Trump administration knew about it and passed a rule to help Dream Center restore that accreditation.
“The Department of Education was aware that two Dream Center schools had lost their accreditation,” Bobby Scott, D-Va., chair of the House Education and Labor Committee, said in a statement.
“Rather than cutting off their access to taxpayer money — as the law requires — the documents reveal that the department continued to send these schools millions of dollars in federal financial aid, while also working behind the scenes” to help the schools, Mr. Scott stated.
Accreditation woes
The finger-pointing in Washington is another chapter in the long demise of the storied Art Institute chain, a brand of trade schools founded in 1921.
The dispute focuses on the accreditation issues faced by Dream Center, a nonprofit that bought the Art Institutes in 2017 from Education Management Corp., a for-profit education company based Downtown that had run the schools for a half-century. The $60 million acquisition involved dozens of colleges that enrolled roughly 60,000 students and employed about 15,000 faculty and staff.
The new owners promised the nonprofit status would breathe new life into beleaguered schools that had seen precipitous enrollment drops due in part to federal investigations into illegal recruitment tactics at EDMC and other for-profit colleges. EDMC settled charges with the U.S. Justice Department in November 2015 by paying $100 million, admitting no wrongdoing.
Yet Dream Center, a philanthropic organization affiliated with a Pentecostal church that funds programs across the country for underprivileged people, had no experience in higher education when it signed the deal with EDMC.
And it quickly became clear the schools were hemorrhaging money: In court filings last year, Dream Center officials described their surprise at realizing the former EDMC schools would lose a total of $64 million in 2019.
The complicated nature of the deal and Dream Center’s ties to for-profit schools also drew questions from the country’s six regional accreditation agencies. Accreditation — higher education’s way of enforcing quality control measures — reviews finances, academics, policies and other measures to ensure schools are meeting minimum standards.
In June 2018, the Pittsburgh Post-Gazette reported Art Institute campuses in Michigan, Illinois and Colorado had lost accreditation five months earlier, yet Dream Center had continued to market the schools as accredited. The lapse was first revealed by Republic Report, a public policy blog run by David Halperin, a Washingtonbased attorney who has written extensively about education issues.
Dream Center shuttered about half the schools it bought, then the rest of them were transferred to federal receivership.
The Art Institute of Pittsburgh closed abruptly on March 8, 2019, shocking many of its distinguished graduates. Students carted out their artwork from — and in some cases looted — the Strip District school.
Blame-throwing in DC
House Democrats and the Trump administration have been trading barbs in the wake of the Art Institute collapse.
In July 2018, citing Post-Gazette reporting, Sen. Dick Durbin, D-Ill., called for a congressional investigation into Dream Center.
In July 2019, the House Education and Labor Committee released an initial trove of emails and documents that suggested the Education Department attempted to bail out Dream Center by reversing a policy that had long prohibited schools from retroactively accrediting programs.
The subject of Wednesday’s meeting, held by the National Advisory Committee on Institutional Quality and Integrity, was a department staff report that suggested the HLC be barred from accrediting new schools for one year.
“The department staff continue to have concerns about HLC’s resistance to correcting the record and taking appropriate action to help students that had formerly attended the institutions,” the staff report stated.
After a day of testimony from education officials, the committee rejected the report. The department will consider the recommendation.