October 19, 2017

With CollegeAmerica Trial Underway, Someone Just Posted An Unhinged Attack on Colorado’s Attorney General

A lawsuit brought by Colorado’s attorney general, Cynthia Coffman, against CollegeAmerica went to trial this week in a Denver courtroom.

It’s a bench trial — no jury; Judge Ross Buchanan will decide the facts. In this document required by the court, the two sides dispassionately describe for the judge what the case is about.

But a new document that has surfaced online offers a more rabid defense of the school. The paper, entitled “The Colorado Attorney General’s Assault on CollegeAmerica,” isn’t attributed to any author, but it provides contact information for the top officials running the school, Carl Barney and Eric Juhlin, “[i]f you would like to help defeat this injustice.”

CollegeAmerica, a for-profit college based in Colorado, sold itself in 2012 to a small non-profit organization called the Center for Excellence in Higher Education and sought Department of Education approval to be freed of the federal rules that apply only to for-profit schools. But the Department of Education concluded that despite the conversion, the chain was still operating to benefit its prior for-profit owner, the wealthy, conspiracy-spouting Ayn Rand disciple Carl Barney.

In the lawsuit being tried now, the attorney general’s office, on behalf of the state of Colorado, contends that CollegeAmerica engaged in the systematic fleecing of students and taxpayers — that CollegeAmerica staff consistently misled and lied to students about the selectivity of the school, the transferability of credits, the jobs they could obtain, the salaries they could earn, and more.

An example: The school, according to the AG’s office, hyped its “Medical Specialties” associate degree as leading to lucrative careers in a range of medical jobs. The program cost $42,000 — more than four times as much as comparable degree programs at community colleges. But most of the jobs that graduates had a chance to get were low-level, low-paid positions did not require a college degree at all.  Once students had completed the program, CollegeAmerica employees would then sometimes disparage the value of the program and hype the next expensive program — a bachelor’s degree in Healthcare Administration. But again, most graduates could only get low-rung jobs that did not require an associate’s degree, let alone a bachelor’s.

The new published assault on the Colorado attorney general’s lawsuit includes an unhinged personal attack on the lead assistant attorney general on the case, Libby Webster.

Among the paper’s assertions:

–“CollegeAmerica is a good college run by good people who do good work helping underserved students to earn a degree, improve their lives, and make more money. The Colorado AG’s assault on CollegeAmerica is an assault on the good for being good.”

–“The assault is led by Assistant Attorney General Libby Webster (formerly DeBlasio), who apparently loathes businesses and profits, believes that college education should be ‘free,’ and seeks to cripple and close private career colleges that make government-run community colleges look bad by comparison.”

–“Apparently emboldened by her success in intimidating and extorting both Westwood College and Argosy University into multi-million dollar settlements, Webster is using every unscrupulous tactic in her toolbox in an effort to bilk CollegeAmerica for millions. (One wonders where these millions of dollars in settlements go. Does so much as a penny reach students, the alleged victims? How is Webster compensated? Of course, she couldn’t be on commission, at least not legally. But, in addition to promoting herself and gaining political prestige, is she receiving large raises for pilfering these millions? Her aggressiveness certainly suggests so.)”  [Note: You can read about Colorado’s supposed “extortions” of for-profits Westwood and Argosy here; the state offered strong allegations of serious wrongdoing at each school.]

–“Assistant AG Webster did not have credible evidence showing that CollegeAmerica had engaged in wrongdoing. Yet she wanted to cripple and close this ‘competitive college’ regardless of its innocence.”

–“The AG claims that tuition at CollegeAmerica is ‘too high’ — but this claim drops massive context, and evades the very facts that give meaning to the concept of ‘price.’ Does the AG regard Yale as too expensive? How about Colorado College or University of Colorado (Webster’s alma mater)—both of which have higher tuition than Yale? How about local private kindergartens or Montessori schools? Or a Tesla or a Ford? The price of a product or service is an agreement between the parties involved. As long as each agrees to the terms and delivers what is promised, as long as neither party is coerced or defrauded, the price is by definition fair.”

–“Every taxpayer-dollar, every man-hour, every resource wasted in the AG’s crusade against CollegeAmerica is a dollar, man-hour, or resource that could have been be used to support students rather than undermine students’ dreams and destroy colleges that help students realize those dreams.”

–“When everything is included—length of program, tuition, opportunity costs, and living expenses—CollegeAmerica is much less expensive than Colorado community colleges.”

In reality, the state has a powerful case. And in reality, Libby DeBlasio Webster is a dedicated public official, a skilled lawyer, an expert in higher education policy. If she wanted to make big money, as the pro-CollegeAmerica screed suggests, it would be easy for someone with her skills to sell out. (See Guryan and Jones, below, or this report.)  Webster is working to protect students and taxpayers from abusive practices, nothing more, and nothing less.

I think the attack on Webster revealed instead the mind of the angry screed’s writers: They can’t see why anyone would make an effort unless the goal was to get rich.

In its opening statement at trial, CollegeAmerica’s lawyer tracked the politically-motivated-conspiracy-theory approach of the online diatribe.

But a courtroom observer says that Judge Buchanan is a no-nonsense jurist who won’t be played; pre-trial, he denied a string of CollegeAmerica motions to hide and exclude evidence, as well as denying most of a motion to dismiss the case.

In the trial’s first week, DeBlasio has called to the stand former students and ex-employees who methodically walked through some of CollegeAmerica’s deceptive and predatory practices.

Most notable was a student whom CollegeAmerica managed to a sign to enrollment agreements for three separate programs, including a bachelor degree in computer science, even though, it turns out, the student has a “permanent and total” cognitive disability and thus was unlikely to benefit from the programs. One of the degrees cost $56,000. The ex-student now works at a dishwashing job set aside for disabled people.

This student also was presented with a “Satisfactory Academic Progress” appeal that he purportedly filed with the school, asking to remain in a program he was flunking; he testified that he didn’t write it.

On Thursday, Rohit Chopra, a top policy official at the Obama Department of Education and now the White House’s nominee for a Democratic seat on the Federal Trade Commission, was called as a witness by the attorney general’s office. Chopra carefully described the unusual EduPlan private loans that CollegeAmerica provided directly to students. The loans appeared to be be money-losers for the school, especially because many students were unlikely to repay them. Chopra concluded that the loans were a backdoor way to comply with the federal 90-10 rule, which requires for-profit colleges to obtain at least ten percent of their revenue from sources other than Department of Education grants and loans.

CollegeAmerica’s proposed expert witnesses are Northwestern University economics professor Jonathan Guryan, a long-time favorite hired booster of the for-profit college industry; and Diane Auer Jones, who cashed in on her role in the George W. Bush administration as assistant secretary for post-secondary education to become an in-house lobbyist for predatory for-profit college company Career Education Corporation before becoming an industry consultant. The Colorado attorney general’s office has filed motions contesting the appropriateness of Guryan and Jones testifying as experts.

In 2014 the U.S. Justice Department joined a separate employee whistleblower lawsuit charging that CollegeAmerica paid its recruiters bonuses, commissions, and other forms of incentive compensation in violation of the federal ban on such payments. The suit further claims that CollegeAmerica employed faculty members who lacked the minimum qualifications required by the school’s accrediting agency, and that CollegeAmerica officials falsified student attendance records and grades. Last year a federal judge refused to dismiss that case. As the lawsuit’s endless docket sheet reveals, the Barney chain has been fighting in court ever since to conceal documents relevant to the case, even though the judge keeps ruling against it. The chain is claiming that, in paying the bonuses, it was relying on legal advice from its attorney, LinkedIn celebrator Keith Zakarin. No trial date has been set.

The school is now also in hot water with its accreditor and state oversight agency. In June, the Colorado Commission on Higher Education, acting unanimously, revoked its authorization for CollegeAmerica’s Denver campus ability to enroll any new students in its bachelor degree programs. The commission also placed two other CollegeAmerica campuses, Colorado Springs and Fort Collins, on probationary status. According to the minutes of the commission meeting, the decision came after the school’s accreditor, Accrediting Commission for Career Schools and Colleges (ACCSC), took action against the school and “sent communication to the institution citing compliance with standards and requirements on a continuous basis as the main reason for the revocation.” According to the minutes of the meeting, the affected BA programs are to remain accredited by ACCSC only for the purposes of allowed existing students to complete their programs.

In 2013, I obtained a letter that an employee of Stevens-Henager, another school in the Carl Barney chain, wrote to government authorities alleging a lack of standards and integrity in the school’s recruiting. It read in part: “Our admission representatives are required to enroll anyone and everyone. All entrance and diagnostic testing has been eliminated… Toothless and homeless people are not marketable and will never pay back student loans. We still enroll them….  Our director said, ‘Get 40 people and I don’t care what you say or do to get them.’”

Students who get deceived by college recruiters often end up worse off than when they started. CollegeAmerica schools have established records of leaving their students deep in debt. For example, as of 2009, 40.2 percent of students at the Flagstaff, Arizona, campus of CollegeAmerica defaulted on their loans within three years. The figure was 38.8 percent at the CollegeAmerica campus in Denver. For comparison, the default rate at Michigan State University was 4.3 percent.

This article also appears on HuffPost.