Investigating the Administration’s Involvement with For-Profit Colleges

Secretary Betsy DeVos’ Department of Education has been heavily criticized for its lax oversight of for-profit higher education, and on Wednesday it will face two new challenges to its governance of the industry: a House Oversight Committee hearing, and a new lawsuit from American Oversight and the National Student Legal Defense Network.

On Wednesday afternoon, Principal Deputy Undersecretary Diane Auer Jones will testify before the House Oversight Committee about the department’s regulatory rollbacks and other decisions related to accreditation and student loans. Wednesday’s lawsuit, which American Oversight filed on behalf of NSLDN, seeks the release of records related to the Dream Center, which owned financially troubled schools that in 2018 accepted tuition payments without telling students that their accreditation status had changed.

Officers of the Illinois Institute of Art, which had been purchased by the Dream Center, had told students that Jones and other Education Department officials had said the school’s accreditation could be retroactively restored to courses already taken. Last week, Jones wrote to Congress denying that the department had advised the Dream Center to misrepresent its accreditation status.

In late 2018, NSLDN filed two Freedom of Information Act requests to the Department of Education, seeking agreements and communications between the department and the Dream Center or its schools. The department’s failure to respond with the requested records prompted today’s lawsuit.

On Tuesday, American Oversight filed a new FOIA request for Jones’ communications with outside groups. Prior to joining the administration, Jones was a lobbyist and consultant to for-profit colleges. Her current position gives her the authority to oversee the accreditors of organizations she previously worked for, and has spoken of the need to give accreditors the ability to “tolerate some risk” when it comes to approving programs — even if student borrowers wind up being on the losing end.

In November, American Oversight sued for records related to the Education Department’s decision to cut back on debt relief for defrauded student borrowers. The borrower defense rules, introduced during the Obama administration, allowed student borrowers to petition the department for loan forgiveness if they had been defrauded by their schools, but DeVos’ department had delayed implementing the rule as it sought to revise it.

American Oversight is also representing NSLDN in two other lawsuits against the Department of Education. One, filed in June 2018, seeks communications regarding the administration’s attempt to block states from using consumer protection laws to crack down on abuses by student loan servicers. The other, filed in August 2018, seeks records related to the department’s role in helping the giant loan servicer Navient defend itself against a Consumer Financial Protection Bureau lawsuit regarding its and other loan servicers’ having misled or cheated student borrowers. Last week, CFPB Director Kathy Kraninger said that the department was getting in the way of the agency’s efforts to hold the student loan industry accountable.