Committee Report Reveals Senior Education Department Official Aided For-Profit Higher Education Company in Misleading Students Using Taxpayer Dollars

WASHINGTON – report released today by the Committee on Education and Labor reveals that a high-ranking official at the Department of Education quietly worked on behalf of a for-profit higher education company that was actively defrauding students and taxpayers. New documents published in the Committee’s oversight report strongly suggest that Under Secretary Diane Auer Jones – a former for-profit education lobbyist – went to extraordinary lengths to aid Dream Center Education Holdings despite knowing that two of its schools had lost accreditation and were improperly receiving tens of millions of dollars from taxpayers. 

The documents also show that Under Secretary Jones provided misleading testimony to Congress about her role in attempting to help Dream Center conceal its misconduct. 

The Committee report, entitled “Shattered Dreams: Examining the Education Department’s Role in the Misconduct of Dream Center Education Holdings,” presents dozens of documents and emails detailing how Dream Center lied to students about the accreditation status of two of its recently purchased schools, the Art Institute of Colorado and the Illinois Art Institute. For more than five months after the two schools lost their accreditation, Dream Center continued telling students the schools were accredited while improperly collecting millions of taxpayer dollars, which they were ineligible to receive without accreditation. 

According to the documents, the Department of Education knew that Dream Center was improperly collecting federal financial aid but did not intervene on behalf of students and taxpayers. Instead, the documents reveal that Under Secretary Jones attempted to personally pressure Dream Center’s accreditor, the Higher Learning Commission (HLC), into taking the unprecedented step of retroactively reinstating the two schools’ accreditation. When HLC refused, the Education Department publicly accused the accreditor of misconduct. 

“The documents show that the Department of Education was aware that two Dream Center schools had lost their accreditation and were no longer eligible to receive federal financial aid,” said Chairman Robert C. “Bobby” Scott.  “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 attempt to secure "retroactive accreditation" for these schools, a process that would change history to erase Dream Center's misrepresentations to students.

“Dream Center’s collapse could eventually cost taxpayers between $600 million and $1 billion. The Education Department refused to cooperate with this investigation, making it difficult to understand its role in Dream Center’s misconduct. The Education Department’s lack of transparency and the actions described in the documents raise serious questions that must be answered.”

The report includes references to 59 separate exhibits, including transcripts, emails, text messages, and other documents.

To read the full report, please click here



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