Arlington, Va. — In response to a report released by the Department of Education’s Office of Inspector General which found that the Department took unprecedented actions before and after the sale of Education Management Corporation institutions to the Dream Center Foundation, Career Education Colleges and Universities released the following statement from President and CEO Dr. Jason Altmire:
“The Dream Center change in ownership transaction had significant red flags that were overlooked. CECU is concerned that staffing shortages at the Department contributed to this failure and we support increasing resources dedicated to review such transactions in a timely yet thorough manner.”
CECU continues to work with bipartisan allies in Congress to advocate for regulatory reform around change of ownership with institutions of higher education. On April 20, 2021, CECU submitted a letter for the record as part of the U.S. House of Representatives hearing on for-profit college conversions. The letter made recommendations to help solve the delays, inefficiencies, and red tape that plague the pre-acquisition review and change of control application process at the Department. The letter is available here.
The report took issue with the Department’s decision to retroactively provide temporary approval for the conversion of two of the institutions to nonprofit status. This unprecedented and legally murky action contributed to the OIG determination that the Department’s oversight was not thorough enough to ensure Dream Center complied with requirements for participating in Federal Student Aid programs.
The report also took issue with the Department’s decision to reduce the letter of credit amount that Dream Center was required to post by about $86 million, despite a pre-acquisition report which found significant financial risks associated with Dream Center’s purchase of the 13 institutions.
Read the report in its entirety here.
Please direct media inquiries to Rachel Tripp, Director of Communications, at Rachel.Tripp@career.org