Scott Statement on Watchdog Report Showing Trump Administration’s Education Department Improperly Handed $387 Million to Failing For-Profit Schools

WASHINGTON – Chairman Robert C. “Bobby” Scott (VA-03) released the following statement after the Education Department’s Office of Inspector General confirmed that the former Under Secretary of Education exceeded her authority and wasted hundreds of millions of taxpayer dollars to provide a handout to executives and owners at Dream Center Education Holdings.

“This independent watchdog report provides clear evidence that the Trump administration’s Education Department took unprecedented and improper steps to support a failing for-profit college chain and that its actions cost American taxpayers hundreds of millions of dollars. The Education Department’s Inspector General report confirms the central findings from the Committee’s investigation into the collapse of Dream Center Education Holdings and provides troubling new details regarding the Department’s actions. 

“As the Committee previously found, under the leadership of the former Secretary of Education and former Deputy Under Secretary of Education, the Education Department took extraordinary steps to prop up failing for-profit colleges at taxpayers’ expense. This includes disregarding the Department’s own analysis that found Dream Center schools posed a significant risk to taxpayers. Officials at the Department invented the concept of ‘retroactive accreditation’ to justify its decision to continue allowing Dream Center schools to collect money from students and taxpayers, even though they knew that the school was not eligible to receive those funds because it had lost accreditation.  

“Today’s report also includes new details on the Department’s misconduct, including the revelation that the former Deputy Under Secretary of Education signed paperwork releasing tens of millions of dollars in collateral back to Dream Center, despite having no legal authority to do so. The findings also continue to suggest that the former Deputy Under Secretary of Education’s testimony to Members of Congress was, at best, incomplete and misleading. 

“The improper conduct outlined in this report had real consequences for students and taxpayers. The Department knowingly allowed thousands of students to waste valuable time and money at schools that were on the verge of collapse, and the Department released funds to Dream Center that it should have been holding to mitigate the damage to students and taxpayers. Our focus moving forward will be on ensuring the defrauded borrowers are made whole and preventing such egregious misconduct from happening again.”

To read the Committee’s summary of the ED OIG’s findings, click here.


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