South University's Accreditor Takes School Off Warning Status

South University has been given a clean bill of health by its regional accreditor, the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). This week, SACS removed the school from Warning status and reaffirmed accreditation for the school for 10 years. The accreditor also requested a Monitoring Report within six (6) months.

According to a South University press release issued today: 

Dr. Steven Yoho, Chancellor of South University, expressed his pride in the university's achievement. "This renewed accreditation is a testament to the dedication and hard work of our faculty, staff, and students. It reflects our ongoing commitment to providing transformative and quality student outcomes that prepare them for success in a rapidly evolving world. We are proud to maintain the highest standards in academic quality and student support, and this accreditation reinforces our position as a leader in higher education."  

Additional Intel from HEI

South University has been profitable lately, and currently has more assets than liabilities, but it is facing a $36M balloon payment from a $50M Main Street Loan due in December 2025. Main Street Loans cannot be forgiven, and a $36M payment might be difficult to pay out so quickly. SACS is well aware of this impending payment.  Admittedly, the latest posted finances are almost two years old.  We look forward to seeing more up-to-date finances when the latest IRS 990 is posted. 

South could seek another lender to pay off the Main Street Loan. It could also renegotiate its contracts, reduce staffing, and sell off various assets to continue operating. By moving students online, South University could also reduce costs and consolidate operations. It may also be able to increase revenues through increased enrollment and grants.   

For a number of years, the US Department of Education has had South University on Heightened Cash Monitoring 1 for disbursement of federal student aid funds.

We have reached out to South University for comment, but have not received a response as of this publishing date.  HEI is also waiting on a Freedom of Information (FOIA) request regarding Borrower Defense to Repayment claims, which at some point the school could be liable for.  

South University currently educates about 10,000 students, with an estimated 7700 participating online. South also has ground campuses in Atlanta (GA), Virginia Beach (VA), Glen Allen (VA), Round Rock (TX), Columbia (SC), High Point (NC), Montgomery (AL), Orlando (FL), Savannah (GA), Tampa (FL), and Palm Beach (FL).  The school has been in operation since 1899. 

Universities (and Thousands of International Students) Gaming the Visa System

We are following a story first exposed by two Bloomberg journalists about universities that are taking unfair advantage of the US visa system. The program is called Day 1 CPT. 

The CPT (Curricular Practical Training) program has been around for decades, but has evolved over time to give foreigners the ability to work immediately in the US. The student visa system is managed by the Immigration and Custom Enforcement's Student and Exchange Visitor Program (SEVP). A 244 page list of the certified schools is here.

According to the Bloomberg article, "By exploiting a federal on-the-job-training rule, people from India, China and elsewhere can work full time while completing most classes online and showing up in person only a few times a year."

The article listed Harrisburg University of Science and Technology (Pennsylvania-Middle States), University of the Cumberlands (Kentucky-SACS), Trine University (Indiana, Michigan,Virginia-HLC), Campbellsville University (Kentucky, California, Illinois, Florida-SACS), Westcliff University (California-WSCUC), and New England College (New Hampshire-NECHE). All of these colleges and universities in the Bloomberg article are regionally accredited. 

Other Schools that Issue Day 1 CPT Visas

HEI has located a number of other schools that issue Day1 CPT visas: Sofia University (California), Saint Peter's University (New Jersey), McDaniel College (Maryland), Monroe College (New York), Sullivan University (Kentucky), National Louis University (Illinois, Florida), Dallas Baptist University (Texas), California Institute of Advanced Management (California), Tennessee Wesleyan University (Tennessee), Humphreys University (California), International Technical University (California), Ottawa University (Kansas, Arizona, Wisconsin),  Computer Systems Institute (Illinois, Massachusetts), St. Francis College (New York), University of Fairfax (Virginia), and American National University (Virginia).

The F-1 Student Visa System  

The US issues more than 400,000 F-1 student visas each year, but the number that are Day 1 CPT visas is unknown--because Day 1 CPT visas are not issued directly by the government. Instead, they are authorized by the Designated School Official (DSO) at the student's university. 

While the actual authorization for Day 1 CPT is typically handled by the Designated School Official (DSO) at the student's university, the U.S. Citizenship and Immigration Service (USCIS) sets the overall guidelines and regulations governing the program.

The number of Day 1 CPT visas issued each year depends on the number of students enrolled in eligible programs at universities that offer Day 1 CPT and the number of those students who meet the eligibility criteria and apply for work authorization.  

For some, this gets an untold number of foreigners the opportunity to game the system: getting to work immediately in the US while waiting to win the visa lottery.  And when some win, they quit going to school.  

Larger Questions of Fairness and Justice

Bloomberg indicated that this legal (but questionable) visa scheme began in 2014, but did not mention whether the students' employers were complicit or actively involved in gaming the system. 

They also failed to mention the much larger issue of the federal government issuing so many F-1 student visas, while large numbers of American born students are denied access to state universities and private schools that receive federal funds. 

F-1 visa holders also compete with domestic students for good jobs after graduation, potentially leading to lower wages and reduced opportunities for U.S. citizens.

Education Department Needs Stronger Rules for Accreditors (David Halperin, Republic Report)

 [Editor's note: This article originally appeared on Republic Report.] 

I’m scheduled to offer a brief public comment at today’s session of the Department of Education’s negotiating rulemaking meetings, where representatives of various higher education constituencies have come together to debate new proposed regulations governing issues including distance education, state government authorization of schools, and standards for the private accrediting bodies that oversee schools.  My comment will address accreditation, and this is what I plan to say:

Many students say a school’s status as accredited, and resulting seal of approval and aid from the Department, are the reason they enrolled. Because accreditors are gatekeepers for federal aid, their oversight is critical to prevent students and taxpayers from getting ripped off by poor quality, overpriced schools.

So it’s good that the Department has started to incorporate concerns about bad behaving schools in its reviews of accreditors, starting with ACICS, which accredited some of the worst.

But ACCSC also has tolerated years of abuses – at CEHE, Vatterot, and elsewhere. Data shows many ACCSC schools have left students worse off than when they started.  

SACS has permitted blatant abuses at Keiser University. WASC has allowed misconduct at Ashford. COE at Florida Career College.

The Department has started to ask those accreditors questions. But, under current rules, it hasn’t taken firm action, and predatory behavior is ongoing.

The rules also have done little to address rampant abuses at schools overseen by Higher Learning Commission.

HLC has long tolerated predatory conduct at Walden, DeVry, EDMC, Kaplan, Ashford, Grand Canyon, University of Phoenix, and the Perdoceo schools. 

Perdoceo in recent years paid 500 million dollars to settle with 48 states and 30 million to settle with the FTC over deceptive practices. Numerous Perdoceo employees have told the Department that company recruiters continue to make misleading sales pitches. 

As to the University of Phoenix, in 2015 the Pentagon briefly banned it from recruiting service members based on evidence of violations. In 2019, Phoenix agreed to pay 191 million to resolve FTC charges it ran ads falsely suggesting ties to major employers. Last year Phoenix was again running deceptive ads, this time falsely implying it is a state school.

If Phoenix tells such brazen falsehoods in the open, imagine what its recruiters tell students one on one.  The school’s graduation rate is 14 percent. 

Many victims are low income. These schools should not be accredited. They should not get taxpayer dollars. But under current rules, the abuses continue. 

Last year HLC renewed accreditations of the University of Phoenix and Perdoceo’s Colorado Tech, each for a full 10 years.  

And the Department in turn renewed HLC for a full five years. 

The system isn’t working.

Accreditors have often failed as gatekeepers of integrity and quality. The proposed regulations are a start to fixing the problem.