August 12, 2016

At Risk: For-Profit College Converts To Non-Profit Status

The U.S. Department of Education yesterday took a momentous step, deciding that the CollegeAmerica / Stevens-Henager / CEHE chain of colleges, despite formally converting from a for-profit to a non-profit enterprise, is still acting like a self-interested business corporation, rather than a charitable institution, and thus should remain subject to the handful of rules that apply only to for-profits. These rules include the bare requirement that for-profit colleges, to demonstrate their worth, get no more than 90 percent of their revenue from the Department of Education itself; many for-profit chains have been coming perilously close to that line.

The …

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August 11, 2016

Risks of Fraud in Competency-Based Education

An audit report released earlier this month by the U.S. Department of Education’s Office of Inspector General could potentially trigger efforts in Congress to eliminate a critical legal requirement for college programs to receive federal Title IV student grants and loans. That would be a dangerous development, according to a long-time higher education policy expert who provided me with the statement below.

The report, issued August 2, evaluated the efforts of a large regional accrediting body, the Western Association of Schools and Colleges (WASC), to evaluate competency-based education programs — education programs that, as explained by the Department …

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August 11, 2016

College Rebuked Today By Education Dept. Is Suing Ex-Employee Who Complained to Accreditor

As we reported this morning, the U.S. Department of Education today rejected the request of the CollegeAmerica/Stevens-Henager college chain to have its status changed from for-profit to non-profit for purposes of federal financial aid rules. The Department concluded that the chain’s conversion to non-profit status appeared primarily to benefit the for-profit chain’s owner, Carl Barney, rather than students. The chain has responded by calling the decision “wrong and derived solely from this administration’s political agenda against private colleges.”

Republic Report has been covering this predatory college chain, and questioning the terms of its conversion to non-profit status, since 2013. …

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August 11, 2016
Carl Barney CEHE

Department of Education Rejects For-Profit College Chain’s Conversion to Non-Profit

In a critical decision to protect students and taxpayers from fraud and abuse in higher education, the U.S. Department of Education this morning rejected the request of the CollegeAmerica  / Stevens-Henager college chain to have its status changed from for-profit to non-profit for purposes of federal financial aid rules. The Department concluded that the chain’s conversion to non-profit status appeared primarily to benefit the for-profit chain’s owner, Carl Barney, rather than students.   The Department’s release is below, and its determination letter is here.

U.S. Department of Education



Aug. 11, 2016

 Department Denies Request for Chain of …

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August 4, 2016

Twist: DeVry Goes to Court To Stop Students From Bringing Arbitration

For years, DeVry University, like other big for-profit colleges, forced its students to sign agreements that they would take any dispute with the school to private arbitration, rather than sue in court. When, this year, it appeared that the U.S. Department of Education was moving in the direction of banning or limiting such mandatory arbitration agreements for colleges that get federal student aid, DeVry, to its credit, reversed course and announced on May 13 an end to forcing students into arbitration.

When I pressed DeVry officials for details, they made clear in a June 7 email to me that the decision did …

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August 2, 2016

For-Profit Colleges Say Students Are Being Defrauded (By Someone Else)

The for-profit colleges’ depleted trade group CECU (formerly APSCU) reports in a new filing with the government a seemingly remarkable fact: Last month, the association wrote a letter to the Department of Education, the Federal Trade Commission, and the Consumer Financial Protection Bureau demanding that those agencies fight against scam websites run by shady outfits seeking to fleece students. (See p. 179 here.)  The CECU letter warns of “injury to innocent students/graduates.”

That fact is remarkable, because, as documented by multiple congressional investigations, law enforcement investigations, media reporting, and the accounts of students and …

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August 1, 2016

Obama’s Last Chance to Protect Students & Taxpayers From Predatory Colleges

This is the comment (pdf) I submitted today to the Department of Education regarding new rules aimed at protecting students and taxpayers from deceptive practices and other abuses by unscrupulous colleges.


Secretary John B. King, Jr. ,U.S. Department of Education


Re: Docket ID ED-2015-OPE-0103

Dear Secretary King:

I thank you and the Department for implementing rulemaking on these important issues of defense to loan repayment, letters of credit, and mandatory arbitration.

The proposed rule should be strengthened to better protect students and taxpayers, and I endorse the collective comments of our …

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July 26, 2016

Industry’s Top Lobbyist: Stop “Assaults” On For-Profit Colleges

Steve Gunderson, the former congressman (R-WI) who is the chief lobbyist for America’s for-profit colleges, warns in a new email, “There has never been a time when the economic, regulatory and political assaults on our sector have been stronger.” Gunderson, since 2012 the CEO of the discredited, depleted for-profit college trade group CECU (formerly APSCU), writes to for-profit college executives — CECU members and non-members alike — that what is on the line is “saving our sector!”

“Saving” Gunderson’s sector might have been better accomplished by him pressing his members to accept reasonable reforms to reduce fraud by …

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