Breaking: Citing Performance Failures, Accreditor Dumps Independence University
After years of warnings, college accreditor ACCSC Thursday finally withdrew accreditation from the career college operation Center For Excellence in Higher Education (CEHE), which operates Independence University and other schools. In a letter dated April 22, ACCSC informed CEHE’s CEO, Eric Juhlin, that Independence University, the only CEHE school not in the process of closing, “failed to demonstrate successful student achievement by maintaining acceptable rates of student graduation and employment in the career field for which the school provided education over a significant history of reporting and monitoring.”
ACCSC said this failure was “significant in terms of the length of time afforded IU to come into compliance with standards, significant in terms of the breadth of the failure throughout the school’s programmatic offerings, and significant in terms of the number of students the school failed to serve.” (ACCSC informed the U.S. Department of Education and state agencies today of its decision.)
Independence currently enrolls about 10,000 students, all taking courses exclusively online. Current staff members have spoken to me recently about aggressive recruiting tactics and poor-quality instruction at the Barney schools, leading to bad outcomes for students.
Losing accreditation means, by law, losing access to federal grants and loans from the U.S. Department of Education, the main source of revenue for the schools. CEHE already was at risk of losing that aid, and veterans education benefits from the VA as well, because a Colorado trial court last year determined after trial that the company and its executives had violated the state consumer protection law by deceiving numerous students. Eighteen organizations, and I, have petitioned the education department to cut off the aid, citing federal law requiring an aid cutoff for schools and executives found responsible for fraud. Senators Dick Durbin (D-IL), Sherrod Brown (D-OH), and Michael Bennet (D-CO) subsequently called on the Department to do the same.
CEHE appealed the court ruling, has contested the federal aid cutoff assertion, and almost certainly will appeal the accreditor ruling. But the chain, which converted from for-profit to non-profit status in a troubling deal, making its founder Carl Barney even richer, and which this week was scrutinized with other converted schools in a congressional hearing, and which has engaged in blustery attacks on its critics, is also being sued for fraud by the U.S. Justice Department and is under investigation by the Consumer Financial Protection Bureau.
CEHE is finally in the real trouble its bad behavior has long merited. Its abuses have been known for more than a decade.
(CEHE and its schools remain members of Career Education Colleges and Universities (CECU), the main for-profit and career college trade group. CECU has consistently failed to expel predatory colleges, even after blatant school abuses are exposed. [UPDATE 05-05-21: In response to my question, Jason Altmire, CECU’s president, told me today that CEHE is no longer a member of CECU. He declined to provide any details. A list of CECU members, which included CEHE, was still posted at the CECU web domain at least until April 29. It’s no longer there, but it can be found on the Internet Archive; however, it’s unclear when that list was last updated.])
The Independence University website homepage has thus far provided no update to students or prospective students that the school is losing accreditation and thus students may stop receiving federal aid to go there. It still takes names, email addresses, and cell phone numbers of people who want information about the school’s programs.
UPDATE: CEHE employees told me this afternoon they have received no word about the ACCSC action and that recruiters are continuing efforts to recruit new students.
Barney, 79, announced in a post on his blog last month that he was planning to start making “prequests” from his fortune to 20 people in his life because he plans to live to age 120 (“that number is thanks to Dan Sullivan of Strategic Coach and the Attia Medical longevity program”) and so he can impose conditions on the recipients — a Barney beneficiary “engages in happiness planning (with a coach I provide) and then presents a Happiness Plan” and “creates a Financial Plan (how the funds will be banked or invested).”
Maybe instead Carl Barney could prequest his millions to the low- and middle-income students who are deep in debt after paying his operation for substandard college programs.
UPDATE 04-23-21 5:30 pm:
CEHE CEO Eric Juhlin emailed CEHE staff this afternoon about the ACCSC action, and we obtained the email. Juhlin says the accreditor action “was not unexpected,” that his team has been planning for it, and that CEHE has filed a notice of appeal. (ACCSC’s letter said accreditation would terminate May 3 unless CEHE appealed.) Pending the appeal, Juhlin writes, Independence “pursuant to ACCSC rules, will immediately retain its accreditation and remain accredited throughout ACCSC’s appeal process. This means… students will remain eligible to participate in federal financial aid programs.” But, Juhlin writes, “until we have more clarity relative to the appeals process, CEHE believes that it would be inappropriate to recruit and start any new students for the upcoming May 10, 2021 start. Accordingly, we are cancelling the new start that is scheduled for May 10, 2021.”
UPDATE 04-24-21 1:00 pm: Two days after ACCSC notified Independence University that it will withdraw accreditation, effective May 3, unless Independence appeals, the Independence web page on accreditation offers no clue that anything is going on. [UPDATE 05-03-21: More recently, CEHE has updated this page to note that “CEHE received notice that ACCSC has voted to withdraw accreditation for some of CEHE’s colleges, including IU….Immediately upon receipt of the notice, CEHE filed a Notice of Intent to Appeal with ACCSC. It is important to note that under ACCSC rules, a college’s accreditation remains in place during the entirety of the appeals process. Additionally, CEHE made the prudent and right decision to cancel the upcoming start scheduled for May 10, 2021. IU remains accredited as CEHE moves through the appeals process with ACCSC.”]
By letter dated April 23, the U.S. Department of Education’s Office of Federal Student Aid notified CEHE CEO Eric Juhlin that he is suspended, immediately, from participating in contracts or other programs of the federal government. The Department’s stated reason was the Colorado court judgment against CEHE, Barney, and Juhlin, which it said (as our letter and the senators’ letter contended) met the requirement in federal law that aid be cut off in the event of a court finding of fraud.
After recounting in detail the Colorado judge’s findings, the Department’s letter tells Juhlin, “you were well aware of, and complicit in, the fraudulent practices upon which the court based its findings. Your suspension from participation in federal procurement is necessary both to avoid the erosion of public confidence in the integrity of governmental programs and to protect federal funds from misuse.”
The letter, signed by FSA official Susan Crim, says the suspension is temporary, pending conclusion of the Colorado appeal that CEHE, Barney, and Juhlin have filed. Juhlin also is permitted to appeal the Department’s new decision.
Read More from Republic Report: Accountability for CEHE College Chain Is Long Overdue
Senators Dick Durbin (D-IL) and Sherrod Brown (D-OH) today called on Secretary of Education Miguel Cardona and Secretary of Veterans Affairs Denis McDonough to take additional steps to protect students and taxpayers from Independence University in the wake of the ACCSC decision to termination accreditation. “While we appreciate the action the Department took on April 26 to issue a suspension order against Mr. Juhlin,” the senators wrote Cardona, they expect more action.
According to one source, there is a possibility the Department of Education is considering designating an official as a case manager tasked with getting Eric Juhlin out but keeping Independence University going. Based on past failed efforts by the Department to do that with respect to the Corinthian Colleges and EDMC schools, and based on accounts of current CEHE staff who have spoken with me about the extremely poor educational quality at Independence, that seems like a bad idea. It would be better to work to get existing Independence students transferred to better quality programs, help employees find new opportunities — and at last shut the Carl Barney schools down.
Another email to CEHE staff from Eric Juhlin, from last Tuesday, April 27. It references another letter to CEHE from the Department of Education, received April 26, apparently saying that CEHE has 10 days to advise the Department of actions to promptly remove Juhlin from “responsibility for any aspect of the administration of the institution’s participation in Title IV, HEA programs.”
From: Eric Juhlin
Sent: Tuesday, April 27, 2021
To: ALL | Staff
Subject: Update from Eric Juhlin
Dear CEHE Family,
There has obviously been a lot of activity since last week’s action by ACCSC. CEHE’s Board, executives, and managers are all working tirelessly to digest developments, gather information, consider options, and make decisions. All of this takes careful consideration and I appreciate your calm and patience as we continue to move forward.
There are several developments to share with you at this time. First, an initial letter went out Tuesday informing SHC/IU students of the ACCSC action, CEHE’s filing of the notice of its intent to appeal, and that all classes and programs are proceeding as normal. As you all know, there have been no changes to anything involving delivery of classes, programs, student support, and everything related to our focus of delivering the best education possible. This letter and the associated FAQ for students will be added to the IU/SHC website shortly.
The only “academic” change at this point is our decision to pause recruitment right now and to cancel the next start that was scheduled for May 10, 2021. There have been no layoffs, furloughs, or suspensions, and for the vast majority of employees and functions, it is “business as usual” for CEHE and our colleges. That being said, because we feel that transparency and communication is critical, we are in the process of preparing additional communication pieces for students and staff. This effort will include an internal-CEHE FAQ piece that employees can use to assist them with responding to any questions from students. We envision these pieces being completed and distributed within the next day or two. In the meantime, please respond to students with the current information that has been provided and gather any questions that you cannot answer and share those with your managers. Managers, please forward any questions you’re getting “up the chain” so that these can be addressed and added to future guidance and communication pieces.
Another development that you may be aware of is a decision from the U.S. Department of Education that I have personally been “suspended from participating in any covered transactions under procurement and non-procurement programs and activities of any federal agency.” This decision stems from the fact that I was named personally in the Colorado Attorney General lawsuit and that a portion of the district court ruling from that litigation applied to me personally. In my 30+ years of working in higher education, I’ve never heard of this kind of action. And despite some initial discussions with regulatory counsel, I’m still not sure I fully understand what this “suspension” means. Regardless, according to another letter from the USDOE that CEHE received yesterday (Monday, April 26th), CEHE has 10 days to advise the Department of actions to promptly remove me from “responsibility for any aspect of the administration of the institution’s participation in Title IV, HEA programs”. CEHE’s Executive Team and the Board of Directors are gathering more information about this action, getting advice from regulatory counsel, and will respond as necessary.
As you know, CEHE has an extremely talented and highly experienced leadership team. I can assure you that this is the finest and most competent group of senior executives that I’ve ever seen. With that deep level of talent, experience, and strength, whatever adjustments have to be made as a result of this development will be done without disrupting the operations of CEHE, our colleges, and our commitments to students.
That’s all for now – but there will be additional information over the next few days. If you have any questions, please do not hesitate to reach out. As always, stay focused on your role in serving students and doing everything you can to help students succeed. That’s what CEHE is all about. And that’s what matters most!
According to an email he sent to staff on Monday, Eric Juhlin has stepped down as CEHE CEO. Presumably, CEHE is hoping the company can hang on and regain accreditation and eligibility for federal aid if the debarred Juhlin is no longer in charge.
Dear CEHE Family,
Recently, I shared with you that CEHE’s Executive Team and Board of Directors were reviewing two letters that CEHE received from the U.S. Department of Education (on April 23rd and April 26th) informing CEHE that the Department had temporarily suspended me from “participating in any covered transactions under procurement and non-procurement programs and activities of any federal agency.” Let me state unequivocally that CEHE’s Board of Directors, regulatory counsel, and I vehemently disagree with the rationale, justification, and legality of this action. Secondly, it is important for you all to know that CEHE, the Board, and I will be contesting this action.
However, during the period that we are contesting this action, we believe it is important to take several steps to ensure that this bizarre action does not cause any disruptions for students, employees, or CEHE’s colleges. One of those steps (which has always been a part of CEHE succession plans) involves CEHE’s CFO, Mr. Paul Gardner, being appointed to serve as Acting CEO. This change will take effect beginning at 5:00pm mountain time today. There are no other changes being made to CEHE’s Executive Team and leadership structure.
Rest assured that CEHE will keep you updated as we progress in contesting this action. Moreover, there will also be additional updates this week on other recent developments and CEHE’s steps to address those events.
Finally, remember that our #1 job and priority is to serve our students, focus on doing everything we can to make them successful, and tirelessly support your fellow employees. That’s what matters, that’s what important, and that’s what CEHE is all about!
Eric S. Juhlin