The Education Department provided $10.7 million in federal loans and grants to students at for-profit unaccredited colleges, according to documents released Tuesday by the House Education and Labor Committee.
The funds were provided to the Illinois Institute of Art and the Art Institute of Colorado even though officials were aware they were ineligible to receive the aid. The latest documents expand on prior reports that detailed efforts by Education Department officials to protect Dream Center Education Holdings, the owner of the Art Institutes and Argosy University, from punishment for lying to students about the accreditation of its now-closed schools.
Rep. Robert Scott (D-Va.), the chairman of the House Education Committee, is threatening to subpoena Education Secretary Betsy DeVos for more documents about her agency’s role in Dream Center’s actions.
The Education Department has defended its actions.
“It seems to us that the chairman is cherry-picking facts and lacking important context,” Angela Morabito, a spokeswoman for the Education Department, told The Washington Post, which was the first to report the news. “The department maintains that it acted in the best interest of students and has continued to act in the best interest of students.”
The Education Department did not immediately respond to a request for comment from The Hill.
For-profit colleges are mandated by law to be fully accredited to participate in federal student aid programs. The Higher Learning Commission, which is responsible for accrediting institutions, voiced concerns about the quality of education at the two campuses in 2018 and downgraded their status for up to four years, according to The Post.
However, Dream Center continued to advertise that its schools were accredited even after a public notice was issued instructing the company to inform students of the downgrade. Students continued to enroll and the schools continued garnering federal funds.
“The grant of temporary nonprofit status was directed at what had at that time, been a five-month lapse in eligibility, and five months where Dream Center was receiving funds in violation of [the Higher Education Act] and accompanying regulations,” Scott wrote in a letter Tuesday to DeVos. “This special treatment allowed more students to become entangled in Dream Center, magnifying the abrupt closure of the schools and the displacement of thousands of students.”
Former Art Institute of Colorado and Illinois Institute of Art students are suing DeVos and the Education Department over accusations that they issued unlawful student loans they say they should not be forced to repay.
“Had I known what was going on, I would have had time to evaluate the situation, maybe transfer before wasting time and money,” Robert J. Infusino, one of the students involved in the case, told The Post. “I thought the government was supposed to look out for students. I feel betrayed.”