15 Higher Education Stories Worth Investigating – Republic Report

As we approach the end of 2021, here are some higher education stories that I wish I had more time to pursue now. Some of them Ive dug into pretty deeply already, while others I havent done much with yet. If you have info on these matters, please let me know. Or investigate them yourself.

These are largely stories, one way or another, about what happens when government, through weak rules and lax enforcement, allows college operators to put pursuit of big profits over the interests of students and taxpayers.

1. The New York Daily Newsexposed last month that the president and owner of for-profit ASA College, one Alex Shchegol, who was forced out by his board three years ago amid allegations of egregious sexual misconduct, recently ousted most of the schools board members and regained control. The Daily News mentioned that re-hiring Shchegol, who has been accused of rape, coercing students into sex, and sending unwanted pictures of his penis, was defended at a Florida hearing byPeter Leyton, a lawyer representing ASA; Leyton said Shchegol dumped the old board because his expertise was needed to reverse declining enrollments. The Daily News didnt mention that Leyton is a long-time for-profit college industry lawyer who served for more than a decade on the board of the industrys main lobbying group, now called CECU.

The Daily News also mentioned that ASA, which has campuses in New York and Florida, plus courses online, received some $16 million in federal taxpayer money to enroll students, the majority of whom are people of color, in 2019-20. What we dont know is whether the U.S. Department of Education plans to re-evaluate federal aid eligibility for ASA, attendance at which, under Shchegol, has led to poor outcomes for many students. The schools accreditor, which serves as a gatekeeper for federal aid eligibility, already placed ASA on warning status in October, citing a range of concerns about governance and other issues. (Shchegol denies the sexual misconduct charges.)

2. Nicole Carnagey, the chief operating officer of California for-profit Summit College, is apparently being considered for a job running a larger school. Wouldnt the Department of Education, or that schools accreditor, if not the school itself, be concerned that Carnagey spent almost twelve years, rising to a senior executive role, at Corinthian Colleges until that company, one of the worst predatory college operations, collapsed under the weight of law enforcement probes in 2015? Would the fact that Carnagey ran Corinthians California operations concern Vice President Harris, who noted in her 2020 Democratic convention speech that, as Californias attorney general, she sued Corinthian for abuses in the state, including predatory recruiting, false advertising, and fraud? Personal accountability for top executives of Corinthian and other for-profit college scams has been rare. It shouldnt be that way.

3. Another awful collapsed college chain is the Center for Excellence in Higher Education (CEHE). After a Colorado court, following trial, sided with that states attorney general and found the company liable for deceiving students; and its accreditor, ACCSC, acted to drop the companys schools, including online giant Independence University; and finally the U.S. Department of Education restricted the flow of federal aid, CEHE shut down classes and laid off most staff. But CEHE, which then got a partial reversal and remand of the Colorado verdict and is seeking to regain accreditation through legal proceedings, insisted to the locked-out students that it will continue seeking to collect on the high-interest EduPlan private loans they took out even though the Colorado court concluded that these EduPlan loans were part of the companys illegal scheme. Who owns AR Management, the company that administers these loans? Perhaps CEHE head and Ayn Rand worshipper Carl Barney? And what is the status of the Consumer Financial Protection Bureaus investigation into CEHEs private loan practices?

Also, will the University of Maryland, or Maryland state agencies, be looking at the relationships between CEHE and University business school professor Rajshree Agarwal? Professor Agarwal joined the CEHE board of directors, giving the companys schools a public endorsement from the traditional higher education world, at a time when CEHE was under investigation for deceptive and predatory practices by multiple federal and state law enforcement agencies. Meanwhile CEHE in 2019 provided $400,000 in grants to the University of Maryland(grants that Agarwal claims as her own on her CV), and Barney boasted on his blog over the summer that he and his foundation are providing Ayn Rand scholarships and grants for intellectuals at schools including the University of Maryland. Marylands flagship state university was taking funding from CEHE and Barney, which got much of that money by fleecing low-income students and federal taxpayers, while a U MD professors cred was being used to validate the predatory school. Is that how higher education is supposed to work?

4. Another corrupt college operation has mostly been under the radar. In 2016, I wrote about Ultimate Medical Academy (UMA), a Tampa-based career school that converted from for-profit to nonprofit status in a troubling deal, and that featured on its management team some former top officials of disgraced Trump University. The school was getting $150 million a year from taxpayer-funded student aid, yet almost no higher ed expert or official I spoke with had ever heard of it. Right after I published, and in the years since, Ive been contacted by more than a dozen former and current UMA staff regarding predatory practices at the school deceptive and aggressive recruiting, financial aid abuses, pressure on faculty and staff to keep students enrolled, and bad outcomes (low earnings, big loan debt) for many ex-students.

The schools IRS filings reveal big salaries and payouts for executives and insiders of the supposedly non-profit operation.

A 2017-19 review by the U.S. Department of Education found violations in several areas, including disbursing federal aid to students with invalid high school diplomas, but the probe was closed after UMA promised to do better.

Journalists, the education department, and the IRS should be taking a close look at UMA.

5. Predatory Ashford University, exposed at a 2011 Senate hearing as, in the words of committee chairman Tom Harkin, an absolute scam, is right now on trial, along with its owner, Zovio, in a San Diego courtroom, facing a case brought by the states attorney general, who alleges unfair and fraudulent business practices. Ashford has received hundreds of millions from U.S. taxpayers, often with dismal results for students.Im getting dispatches from a courtroom observer, but is any media covering the trial?

Maybe citizens of neighboring Arizona would be interested, especially given that that states flagship school now owns Ashford, rebranded University of Arizona Global Campus (UAGC), in a shady partnership with Zovio, which still runs the school and is still engaged in predatory practices there. (Check out these Yelp reviews.) Last month I spoke with a former Ashford / UAGC instructor who said school higher-ups pressured teachers to give passing grades so students would remain enrolled and paying tuition, even for students who were incapable of doing the work or submitted obviously plagiarized papers.

Education reporters might also be interested in UAGCs application, apparently still pending at the Department of Education, to get preferential non-profit status, and the recent actions of the schools accreditor, WASC, to demand the school explain how it plans to straighten up.

Does Zovios new CEO, introduced on Wednesday, have answers?

6. On a parallel track, another predatory for-profit school, Kaplan University, is now disguised as Purdue University Global, operating under a dubious arrangement between Kaplans former owner, Graham Holdings, and Purdue president Mitch Daniels. Hows that going these days?

7. Florida Career College, which, numerous former and current employees have told me, engages in deceptive and fraudulent practices and will enroll anyone with a pulse to get their federal aid dollars, is being sued by former students for targeting Black people for their predatory programs. Long-time for-profit college industry lawyer Keith Zakharin and a former George W. Bush White House lawyer are representing International Education Corporation (IEC), parent company of Florida Career College, in the case. Over the summer they managed to convince a Florida federal judge (Trump appointee Roy Altman) to uphold fine-print clauses in the students enrollment agreements barring them from suing the school and requiring them to pursue any grievances in arbitration, a process that favors corporate defendants. The Obama administration had issued a rule barring colleges that get taxpayer aid from enforcing these oppressive mandatory arbitration clauses, but Trump education secretary Betsy DeVos erased that regulation. (Now the Biden administration is moving to reinstate it.)

In recent briefs filed with the court, the students lawyers, from the Harvard Project on Predatory Student Lending, ask the judge to reconsider, arguing, among other things, that the students had a right to sue because DeVos had not yet revoked the Obama rule at the time they sued. They also argue that forcing the students into arbitration would violate FCCs agreement with the Department of Education for participating in the federal aid program, where they promised not to do that.

The Harvard projects filings also include the transcript of a deposition of IEC vice president Bob Adler in which he makes a number of telling admissions, including that: FCC recruiters cold call people who may have been looking on job training websites and have never expressed interest in attending the school; FCC instructs admissions representatives to emphasize urgency in a prospective students need to enroll; FCC makes no effort to determine whether prospective students have criminal records that may prevent them from obtaining the jobs they are training for; FCC has no policy for rejecting applicants who lack a high school diploma or GED and are unwilling to take a qualifying test; FCC admissions representatives are not required to verify English language fluency, even though the schools programs are in English; FCC financial aid staff provide students with documents showing the loans they have signed up for only on request; and FCC does not follow up to ensure that its graduates are employed in the field for more than one week.

Multiple FCC employees tell me that IEC and FCC are abusing the federal ability-to-benefit rules by enrolling an extremely high volume of students who lack a high school diploma, and also are enrolling many students who dont speak enough English to comprehend the classes.

In declarations the students lawyers have submitted in the case, former FCC employees report egregious abuses at the school echoing allegations that employees provided to me last year.

Former FCC admissions representative Twyla Prindle said that: many prospective students did not understand the costs of the programs they were enrolling in, and could not afford them; prospective students who did not want to enroll were pressured into talking with at least three FCC representatives before they could leave campus; FCC enrolled students whom it knew would not be able to jobs in their fields, such as students with criminal records and students with intellectual disabilities; students without high school diplomas were assisted by proctors in passing a test in order to enroll; FCC admissions representatives were yelled at by supervisors for failing to meet enrollment quotas; and FCCs Jacksonville admissions director would pressure black students to enroll, but would provide white students recommendations for other options.

A former FCC loan collections officer, Howard Glantz, declared that: FCCs financial aid process during enrollment was rushed, and a high percentage of FCC students did not understand what they owed; FCC collections staff were paid bonuses based on how much they collected from students; the purpose of FCCs high-pressure collections process was to help FCC meet its legal obligation to maintain at least 10 percent of its revenue from sources other than federal aid; and FCC faculty falsified class attendance records, vouching for students who were not actually there.

Kenneth Lundy, who focused on recruiting veterans, compared FCCs operations to a used car dealership. He said that: some prospective students were invited for job interviews when the real intent was to enroll them in the school; IEC officials routinely berated FCC employees for not meeting admissions targets; and IECs CEO, Fardad Fateri, was personally involved in monitoring the recruitment performance of recruiters.

Given the powerful evidence of its abuses, how is IEC/FCC still receiving tens of millions of taxpayer dollars, and the Departments seal of approval to enroll students, every year?

8. As Inside Higher Ed reported last month, Ohios Eastern Gateway Community College radically cut instruction expenses after partnering with a for-profit company called Student Resource Center. The deal has made millions for Student Resource Center, which has been taking 50 percent of the profits, as enrollment, mostly online, has skyrocketed, but the school is now in trouble with its accreditor, Higher Learning Commission, over educational quality. Student Resource Center CEO Michael Perik, a long-time education industry executive, has strong ties to Eastern Gateways president, and faculty and staff at the school say, according to Inside Higher Ed that Perik seems to have unchecked power in academic matters at Eastern Gateway.

As we reported in 2019, Mike DeWine, now Ohios governor but in 2018 its attorney general, engaged in discussions with the collapsing Dream Center Education Holdings (DCEH) and the Betsy DeVos Department of Education about Eastern Gateway acquiring Argosy University from DCEH. Under the plan, Michael Periks operation would have received the servicing contract for Argosy after Eastern Gateway bought it, and DECH would have kept a piece of the action. DeVoss team, led by Diane Auer Jones, later insisted that the Eastern Gateway servicing contract for Argosy would go to a company called Colbeck, though Perik and others could get subcontracts. Colbeck ended up buying many of the DCEH schools, but the deal with Eastern Gateway didnt happen. However, the deal-making efforts suggest that Perik had even bigger dreams for making money off state-owned Eastern Gateway. What is his next move?

9. When retired Army Major General James Spider Marks, a familiar cable news guest on national security issues, offered comments (echoing his written submission) at a Department of Education public hearing in October, he attacked recent bipartisan legislation that was aimed at protecting U.S. military service members and veterans by strengthening the federal rule which prohibits for-profit colleges from obtaining more than 90 percent of their revenue from federal aid. Marks referred to this federal 90-10 rule as arbitrary and said the new legislation, closing a loophole that motivated aggressive recruiting of veterans and service members, would actually harm military students, even though a large number of national veterans groups strongly supported the provision. Marks did not mention in his statement he previously worked as Military Advisor to the President and Executive Dean, College of Security and Criminal Justice at the countrys biggest for-profit college and one of the biggest recipients of G.I. Bill dollars, the University of Phoenix, a school that has been caught by federal authorities engaging in improper recruiting on military bases and running deceptive TV ads. Marks did identify himself as an advisor to the Centurion Military Alliance. Who funds that?

10. Also, who is funding the Defense of Freedom Institute, a new think tank headed by Robert Eitel, who was one of the top higher education aides at the Trump-DeVos Department of Education and before that worked at not one but two of the worst predatory college operations, Zovio (then called Bridgepoint) and Perdoceo (then called Career Education Corporation)? The group says it will fight the Biden education agenda through lawsuits and vigorous oversight of the regulatory process, and its already advocatingfor public money for religious schools. Is the group, which is already wealthy or connected enough to hire as its lawyers both Bill Barr and David Boies, getting or seeking any funding from billionaire Betsy DeVos, who is quoted in their recent press release? Are there connections to the ultra-wealthy non-profit Strada Education Network, which repurposes old student loan profits to support and invest in for-profit colleges, and is headed by former Bush deputy education secretary William Hansen, who sits on the Perdoceo board of directors?

11. The New York Times media columnist Ben Smith published an article in August, headlined Youve Never Heard of the Biggest Digital Media Company in America, about South Carolina-based Red Ventures (barely 100 yards over the state border from suburban Charlotte, NC). Smith notes that the company owns popular travel websites Lonely Planet and The Points Guy, tech site CNET, and Healthline, plus the education advice site BestColleges. But the sophisticated Mr. Smith missed a piece of the story: BestColleges may be styled as an advice site, but its searches quickly lead visitors not to the best colleges, but to ones that pay to advertise on the site, some of them schools with records of misleading, overcharging, and abusing students, such as American Intercontinental, the University of Phoenix, and Purdue Global. And BestColleges isnt the only shady lead generation site run by Red Ventures; we came across, for starters, accounting.com, which feeds into the same search engine that spits out the names of online schools.

12. In 2018, California for-profit San Joaquin Valley College (SJVC) acquired health care career school Carrington College from the much larger Adtalem Global Education group (formerly DeVry). An industry source questions how SJVC has the capacity to run Carrington, which operates in larger markets and relies more on major advertising. This source says wealthy and powerful college baron Arthur Keiser, who runs some big college operations and appears to have gained influence over yet another school, St. Andrews University, has been meeting regularly with the owners of SJVC. Any connection to the Carrington deal? (Also, has any college president prior to St. Andrewss head, Keith Wade, made alumns sign a nondisclosure agreement laden with heavy digital rights management before they can read a transcript of his campus meeting with other alums?)

13. Keiser also has long been a central player in the for-profit lobbying group CECU. What did that group mean when it boasted in its annual report last month that it had forged new partnerships with pro-student groups including the Education Trust, Third Way, and the National Student Legal Defense Network? And in the more than 50 meetings with the Biden Administration the CECU report boasts of, what Biden officials attended? Also, what will be CECUs next moves if, as some expect, wealthy California beauty school owner Lynelle Lynch, who took over the reins of Bellus Academy from her husband, becomes the next chair of the group?

14. The Auguste Escoffier School of Culinary Arts, an online school, sends a torrent of press releases celebrating its growth and successes. The school has been bringing in some $27 million a year, three-quarters of that from Department of Education grants and loans. Did you know that Escoffiers founder, Jack Larson, was also the founder of Career Education Corporation, now called Perdoceo, one of the most egregiously predatory companies in the industry, until he left, suddenly, in 2006? Larson, who also worked at other predatory college chains, boasts that while at CEC he acquired renowned brands, including Le Cordon Bleu Schools North America. But that culinary school, once bought by CEC, eventually faced major legal consequences for deceiving students.

15. Finally, what does it say about the promise of the Internet for bringing education to the masses rather than just offering endless scams that edX, the online platform created in 2012 by Harvard and MIT to offer free lectures by the worlds greatest professors, has been acquired by 2U, an online program provider that is getting increasing negative attention for turning numerous traditional universities into predatory operations through overpriced online programs? While the free online edX lectures will remain, they will now serve as lead generators for 2Us expensive degree offerings.

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15 Higher Education Stories Worth Investigating - Republic Report