Accreditor ACCSC Again Grants Maximum Renewal To Troubled For-Profit Colleges (David Halperin)

College accreditor ACCSC has renewed approval of four for-profit colleges owned by California-based International Education Corp. (IEC), a company that was forced to shut down many of its campuses in the past year after a U.S. Department of Education investigation revealed the schools were rigging student entrance exams and engaging in other fraudulent conduct.

By memo dated November 15, ACCSC noticed the public that it had renewed accreditation of four IEC-owned schools for five years, which is the maximum period of renewal that ACCSC grants to colleges. Three of the schools — in Gardena, Riverside, and Sacramento, California — are branded as UEI College, while the fourth, called United Education Institute, is in Las Vegas.

Abuses at IEC schools

In February, the Department of Education terminated financial aid eligibility to another IEC-owned chain called Florida Career College, and the school closed. As part of the resolution of that matter, the CEO of IEC, Fardad Fateri, stepped down. The Department acted because it found, as described in a detailed 38-page letter sent to FCC in April 2023, blatant cheating at FCC on “ability-to-benefit” entrance exams for students without a high school diploma.

Republic Report, relying on interviews with numerous FCC staff, had first exposed that long-running rampant misconduct, along with other blatant recruiting and financial abuses, at FCC. FCC’s misbehavior lured numerous students — veterans, single parents, immigrants, and other struggling Americans — into low-quality school programs that left them deep in debt and without the career advancement they sought.

The Department’s February settlement agreement with IEC indicated that the Department had an open investigation of potential violations at UEI similar to those found at FCC. The settlement barred UEI from administering ATB tests going forward. As part of the settlement, the Department agreed to end its investigation of UEI, if UEI complied with the settlement agreement. That investigation of UEI is apparently now over.

However, a September 2023 letter from ACCSC to IEC revealed that the company was also under investigation by California’s attorney general. It’s unclear whether that investigation remains open.

ACCSC was not the accreditor of Florida Career College, but it does accredit some of the UEI campuses. Soon after the Department announced in April 2023 that it was moving to cut off federal student aid to FCC, ACCSC placed UEI College and International Education Corp. on “System-Wide Warning” status, citing the Department’s findings that senior IEC leaders knew of and encouraged the cheating, and also citing IEC’s alleged failure to inform ACCSC of the Department’s investigation in a timely manner. ACCSC also noted that IEC had voluntarily halted ability-to-benefit testing and enrollment at UEI; the accreditor’s May 2023 order included a requirement that such testing and enrollment be suspended — suggesting already that there might be questions about ATB testing at UEI.

Yet now ACCSC has renewed accreditation for IEC/UEI schools for the maximum period, the same renewal that it would grant to the best-behaving schools. The renewals are effective back to dates in 2020 and 2022, reflecting in part that ACCSC delayed decisions on renewal while the schools were being evaluated, so the schools must seek renewal again soon. But it’s fair to ask whether the full five-year renewals were appropriate, or whether, instead, ACCSC continues to tolerate college abuses, to the detriment of both students and of the U.S. taxpayers who support the hundreds of millions in federal financial aid that have flowed to ACCSC schools.

ACCSC executive director Michale McComis did not respond to a request for comment regarding the renewal for the IEC schools.

Abuses at other ACCSC-accredited schools

The question of ACCSC’s tolerance for predatory college abuses is again squarely presented as ACCSC faces its own next review: its application to be renewed in 2026 by the Department of Education as a recognized accreditor, a status that allows schools it accredits to be eligible for federal student grants and loans. The maximum renewal period for this gatekeeper status is also five years. That review process is already underway at the Department.

The last time ACCSC was up for renewal, in 2021, the Department, citing failures by ACCSC in curbing long-running abuses at another awful predatory college operation, the Center for Excellence in Higher Education (owner of now-shuttered Independence University), delayed renewal of recognition, required ACCSC to explain its conduct, and ultimately extended ACCSC f0r three years instead of five — although the way the process went forward, the practical effect, disappointingly, was a five year renewal.

Data shows many ACCSC schools have left students worse off than when they started.

Since ACCSC’s last review, the accreditor has engaged in other troubling behavior.

Most notably, as Republic Report first reported, in July 2023, ACCSC had watched while Atlantis University, a Miami-based for-profit school, acted in blatant violation of an ACCSC rule governing the use of “branch campuses” tied to a school’s central campus. Atlantis’s executive director was, at the time, the chair of ACCSC.

The Atlantis branch campus, called Florida Palms University, shut down soon after our report. ACCSC then put Atlantis on warning status, via a letter that, as we noted at the time, was heavily redacted in the version released to the public. Whatever problems the many blacked-out passages of the October 2023 letter concealed stood in sharp contrast to ACCSC’s unconditional five-year renewal of Atlantis in December 2022. ACCSC removed Atlantis from warning status by February 2024.

This year, after Republic Report had repeatedly been able to learn valuable information about the bad behavior of some ACCSC-accredited schools through the public release of detailed letters from the accreditor to schools like UEI and Atlantis — at least the unredacted portions — ACCSC moved away from transparency and accountability. It started releasing, instead of the actual letters to schools, vague summaries that keep the public in the dark about what is actually happening.

ACCSC is also the accreditor of troubled Connecticut-based for-profit Paier College, which faces possible closure after losing access to federal student aid and having been sued for deceptive practices by the state’s attorney general. ACCSC placed Paier on warning status in June, citing low graduation rates and weak validation of faculty credentials. But that action by ACCSC came six months after the school, facing scrutiny from the U.S. Department of Education, voluntarily withdrew from eligibility for federal student grants and loans.

Another ACCSC school, Career College of Northern Nevada (CCNN), abruptly closed in February, replacing its website with a closure notice and literally locking students out of the building.

In June 2023, yet another ACCSC-accredited school, Hussian College, suddenly shut down. In June 2022, ACCSC had put Hussian on system-wide warning, citing concerns about student achievement at the schools. But ACCSC removed the warning and renewed Hussian’s accreditation in December 2022.

ACCSC also accredits Florida’s for-profit Southeastern College. There is much evidence suggesting that that school, owned by ultra-rich Floridians Arthur and Belinda Keiser, effectively receives improper subsidies from Keiser University, a non-profit college controlled by the Keisers.

ACCSC’s renewal application and the new Trump administration

Members of the public have until December 6 to submit written comments to the Department of Education regarding ACCSC’s bid for renewal.

The Biden administration, and U.S. Secretary of Education Miguel Cardona, to their credit, took much more seriously the Department’s obligation to review accreditors for their vigilance in guarding against predatory college abuses than the first Trump administration and Secretary Betsy DeVos did. If the second Trump administration, and new education secretary pick Linda McMahon, truly want to help students, and truly want to implement the incoming administration’s professed commitment to rooting out waste, fraud, and abuse in federal government programs, then it should continue the Biden team’s work of holding predatory colleges accountable — and also holding accountable the accreditors that allow such abuses to persist.

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

College Mania!, College Meltdown, and the other "C" Words

What are we seeing in US higher education and American society today?  Lower college enrollments (for some colleges), high student loan debt (for some consumers) and upward mobility and increasing wealth for others. Many of us hope to be the fortunate ones, through hard work and persistence.

Culture and society (including myths, marketing and advertising, and media) tell folks that higher education is essential and elite education is necessary for upward social mobility. Others see higher education, especially borrowing money to go to school, as a road to nowhere: of untold debt and unhappiness. What people are seeing would seem to be confusing, but it shouldn't be if we understand our system and how it works.  

 

Capitalism (also known as neoliberalism) is the underlying program or structure that guides behavior in the US. We are immersed in it. It also guides other values that we may hold about family, religion, government, and the economy. Under this system, the differences between the rich and poor have been increasing for more than a half century and life expectancy and fertility rates are stagnant.

Consumers are bombarded with stories that reflect how we should perceive higher education. The stories that we see and hear may vary and may appear contradictory if we are willing to look at all sides. Some of the stories are myths, others are downright lies. Targeted marketing means that we may not get the same messages as others. 

Class is how the program of capitalism works, with elites at the top, small business owners and managers in the middle, and workers who do the labor necessary to keep society running.  These distinctions may be small in some places and enormous in others, and there may even be overlap in wealth and income.  Social mobility is possible, but in the US social mobility is stagnant for many non-immigrants. Workers are sometimes appreciated but often unappreciated and even scapegoated. 

Communities are diverse and cut across class boundaries and even geography. Groups seen as homogeneous are rarely that. And stereotypes are used (and misused) as a short hand for understanding other people or even ourselves. 

Civics is a formal understanding how the program/system works and typically how to be a good citizen. The idea of what makes a good citizen varies. Civics can be used as a tool of social control or a tool of reform and innovation. 

Conflict consists of opposing thoughts and actions. It can exist inside of us as well as outside, causing cognitive dissonance for those who are mindful. Some degree of conflict is necessary for society to be healthy. Too much conflict can destroy the fabric of society. 

Idaho-University of Phoenix deal has fallen below the radar

For more than four months, neither the University of Idaho nor the University of Phoenix have reported on the status of the proposed deal between the two parties. The last local media report, from the Idaho Ed News came in July, when the University of Phoenix said they were still committed to partnering with Idaho.

The University of Idaho's University of Phoenix Affiliation FAQ page has not been updated and some of the information is obviously outdated. For example, the webpage said that the UI-UoPX sale was expected to be consummated in early 2024. That did not happen.    

 

Screen shot of the University of Phoenix Affiliation FAQ on November 9, 2024. 

Legislative and judicial barriers have delayed the acquisition and the deal remains in limbo. 

In June, the U of I Board of Regents extended the Asset Purchase Agreement through June 10, 2025. The extension allows the University of Idaho to continue negotiating with the University of Phoenix and to incorporate feedback from stakeholders. It would appear that any sale would require approval from the Idaho Legislature, which meets again in January 2025. In the interim, many important questions remain unanswered.

Despite its commitment, Apollo Global Management, the University of Phoenix's parent company, could sell the school to another buyer. But there has been no public mention (or even hints) of an alternative suitor. Since 2021, Apollo has tried selling the school to a number of buyers, most notably Tuskegee University, UMass Global, and the University of Arkansas System. The only deal to be made public before Idaho was in Arkansas, where concerns about the sale led to the deal falling through.

Information on how the school could be purchased continues to be limited. After a previous bond deal in Arizona fell through, the National Finance Authority (NFA) agreed to participate in the UI-UoPX financing. But there is no public information about how the bonds would be structured. Moody's previously said the $685 million purchase could result in a "multi-notch downgrade" in the University of Idaho's bond rating. 

According to the US Department of Education, more than 900,000 University of Phoenix debtors owe about $21.6B in federal student loan debt. And there have been more than 73,000 Borrower Defense to Repayment (fraud) claims made against the school.

The University of Idaho has previously said that any federal obligations for Borrower Defense to Repayment claims would be handled in court, even though more than 19,000 cases have already been settled in federal court, in favor of the student loan debtors. No matter how this could be handled legally, lawsuits related to the University of Phoenix could tarnish the image of the University of Idaho.  

What a Second Trump Administration May Mean for Higher Education (Robert Kelchen)

For the last two presidential transitions, I have written pieces about what the new president (Trump in 2016 and Biden in 2020) may mean for higher education. My expectations back in 2016 were the following:

• He would not repeal the Department of Education. (He never seriously tried.)
• Tuition-free public college was dead. (True at the federal level, but state-level programs grew following Tennessee’s lead.)
• He talked about income-driven repayment changes and going back to having private banks guarantee loans. (Neither happened, although he did pause payments during the pandemic.)
• There would be fewer regulations and an accountability reprieve for the for-profit college sector. (True.)

After four years of President Trump in power, the higher education community has a better sense of what is coming than we did back in 2016. Here are some of the key things that I am watching over the next several months and years.

(1) The subtitle for my piece on the incoming Biden administration was, “If the Democrat wins, he will have to govern by executive order, much as his predecessor did.” That is not going to be as easy this time around. One of conservatives' biggest Supreme Court wins recently was the overturning of the Chevron precedent that will result in less authority for federal agencies to enact regulations. For at least the next four years, this is going to bite the Trump administration right in the behind. Unless…

(2) Political appointees try acting through issuing directives that are implemented before courts can step in, hoping that they will be unwilling to unwind something that is already being done. It hearkens back to the alleged quote from Andrew Jackson: The Chief Justice “has made his decision; now let him enforce it.” A frequent refrain among progressives over the last few years has been that the Biden administration should immediately cancel student debt, making it difficult for the debt to be reinstated later upon court order. It would not be surprising to see Trump appointees trying to score a policy win (or at least some political points with their base) in that manner. Two likely areas are around federal financial aid to so-called “woke” colleges and international student visas.

(3) While Republicans retook the Senate with at least three votes to spare, House control is still too early to tell as of this writing and is likely to be razor-thin. House Republicans had more than a few challenges in the current Congress with a slim majority, and it is going to be difficult to pass a lot of legislation when hardliners and moderates within the GOP disagree on so many things. Conservatives detest omnibus budget bills and have been pushing for 12 separate budget bills for years. But the result is usually one large bill passed in mid-December, which creates incentives for compromise. Trump has not been particularly concerned about deficits, so conservatives are unlikely to get major budget cuts.

(4) The Higher Education Act was last reauthorized in 2008. I still might retire before it happens again, and I don’t plan on going anywhere for a while. While the Department of Education is not going away anytime soon, there are enough Republicans who would rather throw out the entire department than make substantive reforms. Democrats likely prefer the status quo to any new major legislation, so we can keep waiting on reauthorization for a long time. This does not mean that some policy changes cannot happen; the major changes to the FAFSA last year came through an omnibus budget bill in 2020. But any changes will be piecemeal in the grand scheme of things.

(5) President Trump and Congressional leaders will use the bully pulpit to go after selective colleges and their leaders. Last year's House hearings were very effective for Republicans, as they led to several presidents resigning. If something works in Washington, expect to see it again—especially as both Trump and Vance are products of those institutions. Community colleges and regionally-focused public and private institutions are likely to fly under the radar, as going after them will not generate media attention. But I would not want to be a president of a blue-state flagship university or an elite private college right now, and any leader who is not a white man is likely to face additional scrutiny if last year’s hearings were a guide.

(6) Keep a close eye on who ends up at the Department of Education. Most of the commentary out there about potential Cabinet secretaries barely even mentions ED, but he still needs to identify someone to run the agency on an acting basis. Betsy DeVos is off the table for a second term because she resigned in the aftermath of January 6, and this is a job that many conservatives do not aspire to reach. A name that I am watching is Oklahoma’s state superintendent of education, Ryan Walters, as he tried to get Trump-branded Bibles into public school classrooms and supports the elimination of the Department of Education. Will K-12 or higher education be the focus? I have long contended that higher ed is the area of greatest importance for a Secretary of Education, but a focus on social issues may change that.

Higher education was in for a challenging period regardless of who was elected, thanks to growing skepticism over the value of a college education, increasing political polarization by educational attainment, and the state of federal student loans. This week’s election just magnified all of those concerns. Buckle up, folks…it’s going to be a bumpy ride.

[Editor's note: This article first appeared at the Kelchen on Education blog.] 

Questioning the Higher Education Establishment

"So that's how it is," sighed Yakov. "Behind the world lies another world." Bernard Malamud

The Higher Education Inquirer has published a number of articles about how US higher education works and the institutions, organizations, and individuals it serves. 

We have written about US higher education in a number of ways, discussing the history, economics, and underlying ideologies (e.g. neoliberalism, white supremacy) and theories making it what it is--an industry that reinforces a larger (and environmentally unsustainable) economic system and an industry that produces too many unneeded credentials--and soul crushing student loan debt. 

We have listed the myths that US higher education perpetuates and the methods it uses to disseminate them. We have examined a number of higher education institutions and their categories (including university hospitals, state universities, private colleges, community colleges, and online robocolleges). We have investigated several businesses associated with higher education, some nefarious, many profit driven, and a few (like TuitionFit and College Viability App) driven by integrity and values. And we have followed the struggle of labor and consumers. HEI has even created an outline for a People's History of US Higher Education.

But we haven't examined higher education as part of the establishment. Like the establishment that students of the 1960s talked about as something not to trust. The trustees, endowment managers, trustees, foundation presidents, accreditors, bankers, bond raters, CEOs and CFOs who make the decisions that affect how higher ed operates and who at the same time work to make consumers, workers, and activists invisible. 

To say we cannot trust US higher education administrators and business leaders may sound passe, or something that only extremists of the Left or Right might say, but it isn't, and more folks are seeing that. 

Examining US higher education needs to be assessed more deeply (like Craig Steven Wilder, Davarian Baldwin, and Gary Roth have done) and more comprehensively (like Marc Bousquet), and it needs to be explained to the People. It's something few have endeavored, because it isn't profitable, not even for tenure in some cases. 

Without our own sustainable business model, the Higher Education Inquirer will continue writing (and prompt others to write) stories significant to workers and consumers, the folks who deserve to be enlightened and who deserve to tell their stories. 

And as long as we can, the Higher Education Inquirer will ask the Establishment for answers that only they know, something few others are willing to do. 

How College Destroyed the Labor Market (Damon Cassidy)

Underemployment, low wage jobs, and bullsh*t jobs are an important part of the US economy. And the higher education system does not appear to have done much to change this depressing reality. While this video may represent a distortion of US history and society, it should not be ignored. Skepticism about higher education is real, and for good reason, especially for the working class. There are also good points made in this video, including the federal and corporate de-funding of vocational education and crushing student loan debt. 

To understand what can be done, the US needs to look at what more progressive nations have done with education at all levels, and how education is tied to the larger economy and to Quality Of Life. Being able to reform the American system is a challenge, however, when vested interests (corporations and their government surrogates) work to keep the existing system of inequality and injustice in place.

Related links: 

The College Dream is Over (Gary Roth) 

A People's History of Higher Education in the US 

Student Loan Debt

Wealth and Want

Carl Barney, Ex-Owner of Deceptive For-Profit Colleges, Donates Big to Trump (David Halperin)

Carl Barney, the ultra-wealthy former owner of a chain of collapsed for-profit colleges, is the third biggest California-based donor to efforts to elect Donald Trump in 2024, the Los Angeles Times reports today.

Barney has donated $924,600 to the Trump 47 Committee, according to federal records.

Like Donald Trump, who in 2016 paid $25 million to settle civil charges by New York’s attorney general that his unaccredited real estate school, Trump University, defrauded its students, Barney saw his schools shut down after law enforcement agencies and former students went to court over claims of deceptive practices.

Barney explained his reasons for supporting Trump in a fascinating post last month on his personal website.

According to Barney, Trump “approaches the job of President as a businessman, not a politician,” which Barney sees as “mostly a major strength.”

“I’m aware of President Trump’s shortcomings,” Barney acknowledges, “but I won’t criticize him here. (If you want criticism, you’ll find all you need in the popular ‘news’ media.)”

Barney evaluates Trump’s term in office and concludes that the ex-president “significantly improved the individual freedom of Americans to pursue their goals with less government hindrance.”

While Barney concedes that he does not like Trump’s “proposed tariffs and some of his economics,” he likes that Trump “wants to work with Elon Musk to reduce spending, regulations, waste, and fraud in the federal government.

What doesn’t Barney like about Kamala Harris? A number of things, but he zeroes in on this: “Kamala Harris is an avowed enemy of private career colleges and boasts about closing them. Her boasts reveal her disregard for the schools’ students and teachers, as well as the entrepreneurs and investors who created the schools.” Harris, Barney concludes, “holds the anti-freedom values common to radical leftists.” He warns, “These people hate profit, business, and businessmen.”

Barney prepares his audience for the attacks he will face for his endorsement. “Since my contribution to President Trump will be public,” he writes, “I know that I will become more of a political target than I’ve been over the last 10 years. I’ve been a target of trolls, lawfare, and political operatives who finally destroyed my beautiful colleges. I know they will now target me with renewed force and energy. That’s something I will have to confront.”

Barney concludes his post with this unifying message, “If anyone sees something wrong with Making America Great Again (MAGA), then they’re not friends of mine, nor of yours.”

While Barney’s focus on Harris’s role in taking on abusive for-profit colleges is no surprise, his identification of fighting government waste, fraud, and abuse as a key policy priority for him is particularly rich, given his role in running a college operation, the Center for Excellence in Higher Education (CEHE), that received billions in federal taxpayer dollars and ultimately was found liable for deceiving students — and given his schools’ troubling conversion to tax-free non-profit status in a deal that increased his staggering wealth.

In August 2020, following an extensive trial, a Colorado state court sided with that state’s attorney general and found CEHE, its CollegeAmerica school, Carl Barney, and CEHE CEO Eric Juhlin liable for deceptive practices and awarded a $3 million judgment.

The Colorado court found that Barney’s schools used a detailed playbook to manipulate vulnerable students into enrolling in high-priced, low-quality programs; that the schools directed admissions representatives to “enroll every student,” regardless of whether the student would likely graduate; that the schools’ recruiters and advertisements greatly overstated starting salaries that graduates could earn; and that the schools falsely inflated graduation rates.

In April 2021, Independence’s accreditor, ACCSC, ended its approval of Independence University, which by then was CEHE’s main school, effectively repealing its eligibility for federal student grants and loans. Soon after, the U.S. Department of Education restricted the flow of such aid. In the wake of those developments, CEHE shut down classes and laid off most staff.

CEHE and the Colorado attorney general’s office were back in the state trial court in Denver this week, after high-priced lawyers for Barney pursued an appeal to the Colorado Supreme Court that resulted in an order requiring the trial judge to make some additional findings.

Barney also used clever lawyers and accountants to keep making big money off the CEHE schools even after he converted them to non-profit status. When for-profit operations are converted to non-profit in such a manner, U.S. taxpayers can pay a big price.

Although its schools are shuttered, CEHE still faces additional legal challenges. The U.S. Justice Department is moving ahead with a long-pending lawsuit in which it has joined whistleblowers in pursuing False Claims Act fraud charges against the schools. The federal Consumer Financial Protection Bureau has pursued a separate investigation into CEHE’s private loan practices.

CEHE, despite the probes, bad publicity, and collapse of its schools, has continued trying to collect the high-interest private loan debt it created for its broke former students.

And CEHE has portrayed itself as a victim of a political conspiracy against it, with ongoing vitriol on Twitter from former CEO Eric Juhlin, whom the Department of Education took the rare step of suspending from federal contracting. More attacks on CEHE critics, and the Colorado attorney general office and court, have come from Barney.

Barney has charged on his grievance-heavy blog that the case brought by the Colorado AG against his schools is a “horror story of government corruption,” and “a multi-agency collusion to put schools out of business” — a supposed plot that involved not only a senior assistant Colorado attorney general, but also the executive director of accreditor ACCSC, officials of the U.S. Department of Eduction, and “the cabal of progressive haters of private colleges (David Halperin, Robert Shireman, entities funded by Arnold Ventures, Sen. Elizabeth Warren, and Sen. Richard Durbin).”

In December 2022, CEHE took its grievance campaign to a new low by suing the United States government for $500 million in the U.S. Court of Claims, asserting, as a press release statement by Juhlin contended, that the Department of Education “in coordination with ideological confederates… has been on a campaign to cripple and close as many private career colleges as possible” and that CEHE’s schools were “a victim of this campaign.”

As we reported yesterday, billionaire Betsy DeVos, who helped Barney and other predatory college operators as Donald Trump’s secretary of education but resigned over Trump’s incitement of the deadly January 6 assault on the U.S. Capitol, recently donated $250,000 to America PAC, the pro-Trump super PAC created by Musk.

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