Education Department Officials Helped Perpetuate For-Profit College Loan Scam

By Daily Editorials

October 30, 2019 4 min read

The U.S. Department of Education let almost $11 million in federal student aid go to an ineligible chain of for-profit colleges, according to a new report. Now, the department is stonewalling a congressional probe. It adds to the list of reasons Education Secretary Betsy DeVos must go.

Students of for-profit colleges can't legally get federal student aid unless those colleges are fully accredited. Dream Center Education Holdings acquired about 100 for-profit schools in 2017, shortly before several of them, including two in Illinois, lost their accreditation because of quality issues.

The company was ordered to inform its students about the loss of accreditation. Instead, newly released documents show, the company continued presenting the schools as accredited, allowing it to continue collecting federal money through loans to its students.

Far from being a victim of this deception, the Department of Education helped perpetuate it. The documents show department officials knew of the schools' loss of accreditation but continued making loans to their students anyway, in blatant violation of the rules. To justify it, the department retroactively granted the schools temporary designation as non-profit colleges, which don't have the same accreditation hurdles as for-profit colleges.

As a result, many students found themselves on the hook for tens of thousands of dollars in loans for worthless degrees from non-accredited schools owned by a holding company that has since folded. Some of the students are now suing the department, claiming it was complicit in misleading them.

This mess is under investigation by the House Education and Labor Committee. But, as members of the Trump administration typically do these days, DeVos and her department are refusing to cooperate. A department spokesman alleges Democrats on the committee are "cherry-picking" their facts. If true, that sounds like a reason to send in department officials to testify and tell their side. Yet they're stonewalling.

DeVos, a billionaire Republican political donor, has shown from the start a lack of knowledge on education issues; she's more interested in promoting conservative orthodoxy. In 2017, she defended the dangerous notion that schools should keep guns around by suggesting they might be needed to fend off bears. She has pushed anti-public-education causes like school vouchers. And she has aggressively rolled back Obama-era protections of students on issues like LGBTQ rights, campus sexual assault and — yes — for-profit colleges. Just last week, DeVos was slapped with a $100,000 contempt-of-court fine for violating an order to stop collecting on student loans related to a separate, defunct for-profit college.

For all the staffers President Donald Trump has thrown under the bus, DeVos somehow has survived, despite being a magnet for bad headlines. Now she's refusing to explain why her department helped these scam colleges rip off students. If Trump has just been waiting for a reason, that bus has arrived.


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