Congress Is Investigating the Rapid Closure of Art Institutes Across United States

The Art Institute of Fort Lauderdale, which was one of the campuses affected by the closures earlier this year (image via Wikimedia Commons)

The collapse of a university franchise that owned more than 40 college campuses across the country has left nearly 26,000 students with ample debt and no degrees. Nearly half of the schools shuttered belonged to the Art Institute brand, which once offered classes in animation, graphic design, and fashion.

And last week, House Democrats accused the Trump administration of helping Dream Center Education Holdings — the California nonprofit responsible for the chain’s collapse — avoid culpability.

Representative Bobby Scott (D-VA), chair of the House Education and Labor Committee, has submitted documentation that he says demonstrates Dream Center executives knowingly deceiving students about the lost accreditation of four Art Institutes last year. Scott claims that the US Department of Education knew about the deception and passed a rule to help the franchise regain its accreditation. He has also targeted Education Secretary Betsy DeVos’s top higher education aide, Diane Auer Jones, who he says may have made untrue statements regarding these issues in testimony and written statements to Congress.

The emails and messages “raise questions about whether the department took steps to allow Dream Center to mislead students and how the department should have better protected students,” Scott wrote in his letter addressed to Secretary DeVos.  “The Department informed Dream Center executives that it would work to retroactively accredit the institutions during the period they had lied to students — rewriting history to erase Dream Center’s deceptive marketing practices.”

The Education Department responded to the allegations with a strong denial, hand-delivering its version of the events to the committee’s office on Capitol Hill, according to the Pittsburgh Post-Gazette, which has been following the story. The department’s timeline explains that guidelines made as early as 2008 allowed colleges to retroactively accredit programs.

“A serious look at all of the facts shows Dream Center did not receive any unique benefits from policy decisions made by the department,” Liz Hill, the agency’s press secretary, told the newspaper. “The department was dealing with the issue of retroactive accreditation long before Dream Center came into the picture.”

Turmoil at the Art Institutes continued while students were misled about the accreditation status of their school. The 74 pages of emails and documents released by Scott illustrate Dream Center’s mismanagement of the crisis. At one point, an admissions official with the corporation resigned after being instructed to mislead students about the accreditation status of four Art Institute campuses in Illinois, Michigan, and Colorado.

“The events of the past six months have made it impossible to for me to continue my employment,” the official wrote in an email on June 6, 2018. “Our team was told to ‘punt’ on any questions we received about that status and to change the conversation to a more favorable topic … My heart breaks for the students who have trusted us so completely.”

Back in March, Hyperallergic reported on Dream Center — the charity affiliated with a Pentecostal megachurch in Los Angeles that decided to enter the higher education industry with no experience in the field. The organization bought its university assets from Education Management Corporation (EDMC), which was already having trouble with its schools. In 2015, the corporation paid $200 million in a settlement after an investigation into its recruiting tactics of enrolling students who had little chance of succeeding. And by the end of last year, Dream Center faced eviction on at least nine campuses and owed creditors more than $40 million. The network of schools began to unravel last summer when the nonprofit announced the sudden closure of 18 Art Institutes, nine Argosy University sites, and three South University campuses.

Emails released last week show Dream Center executives and lawyers debating whether to appeal or sue the Higher Learning Commission, the Chicago-based accreditation agency that revoked approvals on Jan. 20, 2018. Ultimately, Dream Center decided to close the schools but not notify the students about its accreditation status until June 20, 2018 — all while students stayed at school and completed two terms of unaccredited courses.

“The fact that Dream Center executives characterized a policy decision on a pending appeal was somehow about them is disingenuous but not surprising,” Hill, the Education Department’s spokesperson said. “They were trying to make it appear they had control of the mess they had made.”

After Scott requested an interview with four department officials, as well as copies of emails and text messages from top officials to Dream Center, the agency’s acting general counsel Reed D. Rubinstein responded.

“The department worked tirelessly with the accreditation agencies to ensure that students could complete their educational programs, preventing a repeat of the catastrophic Obama administration Corinthian College collapse,” Rubinstein wrote, referring to the for-profit school that shuttered in 2015, leaving 80,000 students eligible for loan forgiveness. He suggested that department officials would sit for interviews “as may be necessary and appropriate.”