DeVos Lacked Authority to Reinstate Accreditor That Had Been Stripped of its Status for “Pervasive Noncompliance” With Student Protection Rules

Unlawful Action Allowed Schools to Collect Federal Loan Proceeds, Leaving Students Saddled With Debt and No Academic Credits

DeVos, Senior Aide Diane Auer Jones and Other Trump Officials Have Extensive Connections to For-Profit College Industry

Washington D.C.—  Today, two former students of Virginia College, represented by Democracy Forward and the National Student Legal Defense Network, filed a class action against Education Secretary Betsy DeVos and the Department of Education for unlawfully recognizing a delinquent accreditor of predatory for-profit colleges to the detriment of thousands of students and their families. The Accrediting Council of Independent Colleges and Schools (ACICS) was stripped of its ability to accredit schools in December 2016 for “pervasive noncompliance” with federal student protection rules. In April 2018, Sec. DeVos, without legal authority or any substantive review process, extended ACICS’s recognition, allowing the failing schools accredited by ACICS to continue enrolling students and accepting federal student aid. In doing so, DeVos violated federal law, including the Administrative Procedure Act.

Trusting their Department of Education, their school and its accreditor, plaintiffs Mark Passut and Mark Kaiser took out significant student loans to re-enroll in Virginia College, one of the failing for-profit colleges accredited by ACICS and operated by Education Corporation of America (ECA), for the Fall 2018 term. ECA enrolled 18,000 students across its campuses. Virginia College collapsed in December 2018, preventing the plaintiffs— and thousands of other students like them—from gaining credit for the termbut leaving them saddled with student loan debt. DeVos’s unlawful action therefore harmed the vast majority of ECA students. Today’s suit is filed on behalf of these students as a class action, to force the Department to relieve them of that debt.

“Secretary DeVos and her staff protected an accreditor of predatory for-profit colleges at the expense of students and their families,” said Democracy Forward Litigation Director Javier Guzman. “Students shouldn’t have to pay the price for the Trump administration’s unlawful decision to put the for-profit college industry over those seeking a better life for themselves and their families.”

“Mark Passut and Mark Kaiser counted on the Department of Education to look out for their best interests,” said NSLDN Senior Counsel Eric Rothschild. “But Secretary DeVos’s priority was allowing ACICS to prop up predatory colleges no one else would accredit, rather than making sure those schools actually deserved to stay open. Because of her decision, Mr. Passut and Mr. Kaiser, and their classmates, wasted a term and fell deeper into debt.”

In deciding to restore ACICS’s recognition, DeVos relied on the advice of Principal Deputy Under Secretary Diane Auer Jones, her senior advisor regarding accreditation. Jones has long-standing ties to the for-profit education industry, including ACICS, and has made statements that suggest a skepticism of the recognition process. Following DeVos’s unlawful decision to continue ACICS’s accreditor status, Democracy Forward demanded that Auer Jones recuse herself from further review of ACICS, something she failed to do.

ACICS has long served as the accreditor for many of the country’s most predatory for-profit institutions, allowing taxpayer funds in the form of federal student loans to flow to what Senator Warren’s office has called “some of the sleaziest actors in American higher education.” After the Department revoked ACICS’s recognition in December 2016, schools had an 18-month grace period to find a new accreditor before they would no longer be able to accept federal student aid. In fact, approximately 85 ACICS-accredited colleges were unable to find another accreditor because they failed to meet industry quality standards.

ACICS challenged the revocation and, in March 2018, a court remanded the matter back to Trump’s Department of Education to consider additional evidence. The court did not, however, vacate the 2016 decision to strip ACICS’s accreditation status. The court’s decision therefore allowed the Department to consider ACICS’s status without putting students at risk in the interim. But in April 2018, Secretary DeVos violated the law to temporarily reinstate ACICS’s status allowing the company to continue accrediting schools that were otherwise failing.

ACICS-accredited school Virginia College was one of those schools that tried to secure a new accreditor—but failed to do so. Because of DeVos’s April 2018 decision to temporarily reinstate ACICS, Virginia College was able to continue accepting new students and federal student aid, only to collapse 8 months later, leaving students in the lurch. If DeVos had not illegally put ACICS back on the playing field, Virginia College would not have remained open and its students wouldn’t be saddled with debt for classes they never even got to finish.

The suit was filed June 3, 2019 in the U.S. District Court for the District of Columbia.

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Democracy Forward is a nonprofit legal organization that scrutinizes Executive Branch activity across policy areas, represents clients in litigation to challenge unlawful actions, and educates the public when the White House or federal agencies break the law.

The National Student Legal Defense Network is a non-profit organization that works, through litigation and advocacy, to advance students’ rights to educational opportunity and to ensure that higher education provides a launching point for economic mobility.

Press Contacts

Charisma Troiano
(202) 701-1781
ctroiano@democracyforward.org

Sam Gilford
(202) 276-6485
sam@nsldn.org