When RJ Infusino enrolled on the Illinois Institute of Art's Schaumburg campus after high school in 2015, he believed he was well on his way to a career in audio production.
Even if his experience didn't quite live up to his expectations – the campus consisted of a few floors in an office park, teachers sometimes came very late to class – Infusino continued, thinking that he could at least use the experience and equipment to learn skills that would help him find a job. And the school promised to prepare him for a career.
Then one day in 2017, with less than a year to go, officials announced that the school had been sold to an organization Infusino had never heard of. "At the time, I was madly stressed and trying to look at jobs and see things in the future," remembers the 24-year-old Infusino.
What he didn't know was that the sale of the nonprofit arts institute's campus to the Dream Center Foundation, a Los Angeles-based religious nonprofit with no experience in higher education, had cost the school its accreditation. This meant that it would be difficult to transfer credits Infusino had earned during the period the accreditation was in.
Six months after the school lost accreditation, all students, including Infusino, learned for the first time that the school was unaccredited and court documents said it would be closed. For Infusino, who only needed three-fourths of the classes to graduate, the school's closure was abrupt. However, court documents allege that the school's executives knew for months that it was in financial trouble and likely had to close.
Infusino continued his education at one of the few institutions where his credits were transferred, another Florida nonprofit college where he studied online. But the art institute's shutdown brought him back almost a year to get his bachelor's degree and spat him out on the job market when COVID-19-related shutdown orders went into effect.
He still owes around $ 24,000 in student loans and works as a gymnastics coach, a job he did while he was in school. "I only make about $ 21,000 a year," he said. "How am I supposed to pay off all of this and also pay all of my other bills? It's crazy."
Meanwhile, executives who allegedly knew about the school's accreditation problems have faced no financial repercussions despite the U.S. Department of Education having the power to hold them accountable, according to a new report from the Student Legal Defense Network.
In addition, Congressional Democrats have alleged that Education Department officials took "exceptional measures" that allowed the Dream Center to continue receiving federal grants during the time its accreditation was pending.
Now Dream Center Educational Holdings, the Dream Center organization founded to buy up art institutes and other colleges, is in bankruptcy, a status similar to bankruptcy.
"It's just utter rubbish how easily you can take advantage of someone like me who wants to work really hard to develop a career in the industry they're interested in," said Infusino.
Dream Center Educational Holdings' attorneys did not immediately respond to a request for comment. The Ministry of Education did not immediately comment.
The government has had the power to hold executives accountable since 1992, a new report says
Attorneys for the National Student Legal Defense Network, an organization that represents students in litigation related to the collapse of Dream Center Education Holdings' schools, argue the government has the means to hold such leaders accountable.
In a report released on Monday, the lawyers write that the Ministry of Education has had this power since 1992, but the agency under the presidents of both parties has not used it successfully. The paper is part of a series of student defense proposals that the organization said could be addressed by a new ministry of education in the first 100 days.
When schools collapse due to wrongdoing, it can be costly to the government. On the one hand, federal student loan recipients are entitled to completeness in these cases. Additionally, students attending school at or near the time of closure have the right to have their federal student loans redeemed. In the report, lawyers argue that the owners and executives of these schools can be held personally liable for these lost funds.
If you look at the amount of debt taxpayers now face related to for-profit college closings, billions of dollars have gone out the door and those dollars are not being reclaimed, Dan Zibel said. one of the authors of the paper and the Vice President and Chief Counsel at Student Defense.
“Congress added these personal liability provisions very clearly in the early 1990s, precisely for the reason that when schools close or otherwise fail to fulfill this responsibility to students, the profit is made for the owners and the taxpayers and Students have to pay the bill, "he said.
The idea outlined in the National Student Legal Defense Network report appears to have electoral support from both parties. When asked whether the Department of Education should hold executives personally liable for wrongdoing in a survey commissioned by Student Defense, 78% of 3,199 likely voters in swing states said they would approve or strongly agree to the proposal.
The idea is also supported by a prominent legislature. In a statement published with the newspaper, Senator Elizabeth Warren, a Massachusetts Democrat, criticized the role of "predatory, for-profit colleges" whose executives and owners became "filthy rich in unaccountable taxpayers' money" in excess of US $ 1.5 – Dollar trillion student loan problem.
"We need a Department of Education that will solve this problem, protect students, cancel fraudulent student debt, and, as the Student Defense report shows, use every tool available to hold college executives and owners accountable who hold students personally accountable "Warren wrote in the statement.
"History repeats itself clearly"
The report notes that in re-approving the Higher Education Act in 1992, Congress gave the Department of Education the power to compensate for financial losses suffered by those who "have significant control over (an) institution".
The determination came following an investigation and hearings conducted by then-Georgian Senator Sam Nunn, a Democrat, into federal fraud and abuse.
The investigation found evidence of colleges with solid recruiting efforts and poor educational infrastructure, which in some cases targeted homeless shelters to attract potential students – a result of some of the allegations made against nonprofit colleges today. "History is clearly repeating itself," said Zibel.
In the past few years, several large for-profit college chains have collapsed, including the most prominent Corinthian colleges and ITT Technical Institutes that have cost taxpayers at least hundreds of millions of dollars, but the Department of Education has not held their executives liable. Zibel admits he didn't take this step while serving at the agency as the agency's assistant deputy general counsel for post-secondary education.
"We have seen how liabilities have increased with student debt and costs," said Zibel. "It seems like the department needs to look at this again."
The agency has used its authority to try to collect itself from schools in the event of a sudden closure due to fraud. But if a school disappears before the government gets its money, liability remains. Holding executives personally responsible for these losses could be one way to reclaim those funds, the report argues. (The agency has the power to hold executives and owners accountable even if the school they run still exists, according to the paper).
The Ministry of Justice has the option to bring the owners to justice. In addition, the government, through the Treasury Department, uses exceptional collection powers, including garnishment of social security benefits, tax refunds, and wages, to cash in when a borrower defaults on a student loan.
"The same tools could equally well be in play," said Zibel in the case of former college owners or executives.
Other federal agencies have resigned themselves to university executives for alleged harm to investors
Other government agencies have taken steps to hold for-profit college executives accountable. Corinthian and ITT leaders have reached agreement with the Securities and Exchange Commission on allegations that they misled investors.
“This is damage they have done to investors. There is no clear link with student protection, and students suffer here. "
"That is damage that they have caused investors," said Zibel. "There is no clear link with protecting students, and the students are suffering here. They have harmed the students."
Infusino said he hated to think about how he was targeted and exploited by his previous school, but continues to share his experiences – be it in court, before lawmakers or in the media – in the hope that he will can help prevent similar problems from happening in the future.
"I train children, I don't want them to grow up in a world where this can happen to them," he said. "I want them to go to school and not think about whether or not they are being cheated on."