October 26, 2022

ASA College Withdraws Bid to Stay Licensed in Florida

ASA College Withdraws Bid to Stay Licensed in Florida

Troubled for-profit ASA College today told a Florida oversight agency that it is not seeking renewal of licensure for its Hialeah, Florida, campus, the only campus the company operates in the state. ASA’s  president told a meeting of the Florida Commission on Independent Education (CIE) that the company plans to close the campus next spring and is working on a teach-out plan to provide options for the 240 students currently taking classes there — 40 of whom enrolled just last week. 

Jose Valencia, the president of ASA College, appeared before the Commission’s quarterly meeting (VIDEO), held in Orlando, Florida,  where ASA has been on the agenda for several recent sessions because of concerns about conduct by the school and its president.

ASA College offers programs in nursing, health care, information technology, business, and criminal justice. It reported revenues in the 2020-21 academic year of $52 million, with $33.6 million of that total coming from federal taxpayers through student grants and loans.

Earlier this month, ASA, which also has campuses in Manhattan and Brooklyn, New York, agreed to pay New York City $112,500 in penalties for deceptive ads, many seeming to target immigrants and visitors to the U.S., that were displayed on city subway cars this year. The ads, which began running in January, were exposed in a February article on Republic Report, thanks to photos sent to us by subway riders, including staff of the New York Legal Assistance Group (NYLAG), a non-profit legal services provider that often assists ripped-off college students. 

ASA also has faced controversy regarding Its owner, Alex Shchegol, who was forced out as the college president by his board three years ago amid allegations of egregious sexual misconduct. Last year, Shchegol ousted most of the school’s board members and regained control. But after the New York Daily News exposed the upheaval, and after ASA’s accreditor, Middle States Commission on Higher Education, placed the school on probation, finding it out of compliance with the applicable standards, Shchegol resigned again as president, effective last December 31. Shchegol remains ASA College‘s owner. 

On October 7, Middle States moved ASA College to show cause statusrequiring the school to submit by November 1 a report demonstrating why accreditation should not be withdrawn “because of insufficient evidence” that ASA “is in compliance with the Commission’s standards for accreditation, requirements of affiliation, policies and procedures, and applicable federal regulatory requirements.” Middle States also directed ASA to submit a teach-out plan for students in the event the school shuts down.

At today’s hearing, Valencia spoke with seeming candor about the reasons Middle States provided to ASA for its action and about the challenges facing the school. He said Middle States offered three reasons: (1) ASA’s late payments of wages to staff; (2) the New York City action regarding the subway ads; and (3) a new complaint by a former employee against ASA owner Shchegol. According to Valencia, the ASA board in January 2022 had allowed Shchegol to serve “as an advisor” on “marketing and lead generation activities.” The employee, who was working on those efforts for ASA, said Shchegol engaged in “inappropriate behavior,” although Valenicia asserted, “it had nothing to do with sexual harassment, but just the way he treated her.” 

Valencia said that although ASA’s conduct was “wrong” and “mistakes were made,” he was hopeful that Middle States would remove the show cause order, as it had done the previous time the accreditor put ASA on show cause.

Valencia said he had spoken directly on Wednesday with CIE’s new executive director, Meredith Pelton, and informed her that ASA would not seek renewal from the Florida agency.

Under questioning by Pelton, Valencia and ASA’s consultant Ilia Matos, a former CIE commissioner, discussed plans for a teach-out. Matos said that about 50 ASA Florida students were on track to graduate before the planned June closure, and that the school had written agreements with two schools to take other students and a “verbal commitment” from a third. 

One of the schools Matos cited as signing a written agreement to take ASA students, however, is Florida Technical College, which in 2018 paid $600,000 to settle a whistleblower lawsuit alleging that school employees provided false documentation that enrolling students had high school diplomas, when they did not.  Florida Technical College did not admit liability. The school is owned by Leeds Equity Partners, whose managing partner is Jeffrey Leeds, a well-connected Manhattan socialite who has invested in several predatory colleges and has been active in efforts to undermine accountability rules for for-profit schools. 

When pressed by CIE’s new chair, Mildred Coyne, as to why ASA-Hialeah had enrolled 40 new students last week, just before announcing its closure, Valencia said that the decision not to seeking license renewal was made only on Tuesday. If that is true, it is indeed impressive that ASA could report at 10:00 am on Wednesday that it already had found teach out options for all its students. Valencia admitted ASA “should have had better planning,” but, he said, “it is what it is, and we need to go forward.” 

For-profit schools have regularly enrolled students until just before announcing their closing. Often that last burst of federal financial aid dollars comes in handy as owners take a final “draw” out of the school bank account and other cash needs are addressed.

Another CIE commissioner asked whether the 40 new students would be able to “unenroll” without financial penalty. Valencia said yes, as if ASA had already committed to that. Meanwhile, his consultant Matos said, “We can do that.”

Valencia, while appearing sincere and contrite, ultimately lapsed into what for-profit colleges normally do when they get in trouble for predatory practices — blame the U.S. Department of Education. He said that ASA had been placed in the “impossible” position of operating without funds and had been forced to sell assets, request cash from the owner, and borrow to pay the bills. ASA, Valencia said, had “earned” $20 million by enrolling students yet had received only $192,000 in federal taxpayer dollars for student aid.

Valencia said that ASA’s efforts to get more federal money by reaching out to the Department through “official channels” had failed. “This is a horrific process,” he said. He didn’t know if the Department was engaged in an “intentional delay” but “whatever it is we’re not getting any money.” He said ASA was now working to approach the Department via “political channels” — using “connections” to reach out to Secretary of Education Miguel Cardona. “We’ll see what happens,” he said. 

It’s unclear what decisions the Department of Education has made or plans to make, and whether ASA’s New York City campuses can survive them and the accreditor’s next move.

I doubt Cardona, who has expressed and demonstrated a strong commitment to protecting students from predatory colleges, will be receptive to a political appeal from a college that used deceptive ads to lure immigrants and others, and is owned by a serial abuser. I expect, instead, that his Department will handle this matter based on the facts.

Today’s CIE hearing was the first since Meredith Pelton replaced Sam Ferguson, the long-time executive director of CIE, who was lauded at the meeting by commission members and numerous for-profit college representatives in attendance. Pelton, promisingly, committed herself to strong oversight of career schools in Florida. In June, Florida governor Ron DeSantis replaced the entire CIE commissioner roster, including its long-time chair, Peter Crocitto, a senior executive at controversial Keiser University. DeSantis announced an all-new slate of CIE commissioners

UPDATE 11-03-22:

NYLAG and other legal and consumer groups wrote to Middle States on October 25, pointing out that ASA had publicly suggested that the subway ads were a minor issue. They wrote, “We hope that the Commission takes seriously the interests of the low-income and immigrant New Yorkers targeted by these ads as it considers ASA’s accreditation status.”