March 11, 2023

College Owner Keiser Falsely Says His Schools Have a Clean Record

College Owner Keiser Falsely Says His Schools Have a Clean Record

Arthur Keiser, billionaire operator of three Florida-based career college chains, asserts in an article published this week, “There’s no evidence of misconduct” at his schools.

That claim, by one of the most powerful figures in the for-profit college industry, is demonstrably false.

In reality, there is extensive evidence of misconduct at schools owned or operated by Keiser.

Keiser University, the large career school for which Arthur Keiser serves as “Chancellor and CEO,” has settled investigations over alleged deceptive and predatory practices pursued by both the U.S. Department of Justice and Florida’s attorney general.

The Florida case, settled in 2012 by the state’s then-attorney general, Republican Pam Bondi, involved accusations by students that Keiser’s schools misled them regarding matters including costs of enrollment, accreditation, transferability of credits, and terms of student loans. Keiser’s schools admitted no wrongdoing, but agreed to provide some students with free job retraining and to comply with consumer protection provisions.

In the federal case, whistleblowers claimed that Keiser University violated the law prohibiting colleges from paying incentive compensation, or sales commissions, to admissions staff based on how many students they enrolled. The Justice Department intervened in the case and in 2015 settled with Keiser University, which again admitted no wrongdoing, for $335,000. 

Also, in 2010, Keiser University fired three senior admissions officials following revelations that the school had admitted students based on diplomas from a fraudulent high school diploma mill

Arthur Keiser also engineered a controversial 2011 conversion of Keiser University from for-profit to non-profit status that ever since has provided him with millions in income and ultimately resulted in the Internal Revenue Service finding that lease agreements he had with the school he runs were above fair market value; the IRS imposed additional taxes as a result. 

In addition, Republic Report has exposed whistleblower accounts of continuing deceptive and predatory practices, and abuse of non-profit status, at Keiser’s schools.

Last year, numerous senior leaders in Congress called on the Department of Education to investigate Keiser’s schools.

The Department subsequently determined that Keiser University’s accreditor, SACS, was out of compliance with numerous federal regulations and directed it to provide more information regarding its oversight of Keiser University and that school’s conversion to non-profit status. (Keiser, who somehow serves on, and was until recently the chairman of NACIQI, the Department of Education’s advisory committee on accreditation, complained at a meeting of that panel last week that the Department had increased its scrutiny of accreditors including SACS and ACCSC, the overseer of Southeastern College, a for-profit school owned by Keiser.) 

Collectively, this is more than ample evidence of misconduct at Keiser’s schools. 

Keiser’s false claim of purity is contained in an article published Friday in the publication Washington Examiner in which Keiser and others in the for-profit college industry attack the Biden administration’s settlement of a lawsuit, Sweet v. Cardona. In that action, former students claimed they were deceived by their colleges and that the Donald Trump-Betsy DeVos Department of Education unlawfully rejected or ignored their claims for cancellation of their federal student loan debts.

The Biden administration reached a settlement agreement that would provide some $6 billion in debt relief for about 264,000 former students who claim they were deceived by their schools. Keiser University (through its parent organization Everglades College), and two for-profit college chains went to court to object to the agreement, claiming they would be tarred by their inclusion on a list of 153 schools whose aggrieved students would automatically get loan cancellation, schools that the administration said have “strong indicia regarding substantial misconduct… whether credibly alleged or in some instances proven, and [a] high rate of class members with applications” to the Department for loan relief. 

The students’ lawsuit, brought under a law that allows discharge of student loans where students can show they were deceived by their schools, is separate from the broader initiative by the Biden administration to reduce student loan debt, an effort that was challenged this month in a U.S. Supreme Court argument.

Keiser and the two other schools sought, unsuccessfully, to convince the federal district court in San Francisco to void the entire Sweet settlement and deny debt relief for all the students from all 153 schools, or at least to deny the relief to the former students of their own schools. The court rejected Keiser’s effort, and now Keiser is appealing, continuing the fight to keep his own former students in debt. (Keiser is represented in the case by lawyer Jesse Panuccio, a former Trump Justice Department official who, in this same lawsuit, represented Betsy DeVos in her lengthy and ultimately successful effort, as the ex-secretary, supported by the Biden Administration, to dodge a deposition by the students’ lawyers.)

Friday’s Washington Examiner piece, authored by the outlet’s education reporter Jeremiah Poff, quotes Keiser complaining, “We’ve had prospective students who’ve not enrolled because of this [settlement]… We’re concerned, we don’t understand it, and we have never seen a single complaint that the department has talked about.”  Keiser is further quoted as saying, “We really just want to be let off the list… It becomes a real challenge for us to be part of a settlement that declares that we had misconduct, which we did not. There’s no evidence of misconduct on behalf of our institutions.”

The article quotes not only Keiser but also others in the for-profit college world criticizing the Sweet settlement and claiming that the Biden administration is simply hostile to for-profit schools. One of those is Diane Auer Jones, a senior Department of Education official under DeVos,  but also, as the article does not mention, a former senior executive at the predatory for-profit college chain Career Education Corp. (now called Perdoceo).  Another critic of the settlement quoted in the article is Nicholas Kent, chief policy officer for CECU, the for-profit college lobby group where Keiser has been a dominant figure for decades. 

The Washington Examiner is a conservative outlet owned by right-wing billionaire Philip Anschutz. The article does include a response to the criticisms from the Biden education department, but it fails to fact-check Keiser’s mischaracterizations of his school’s record. 

Another online outlet, Inside Sources, which has in recent years repeatedly published articles attacking critics of for-profit colleges, also has recently posted pieces with criticisms of the Sweet settlement, quoting, among others, Kent and Gerard Scimeca, who works at Consumer Action for a Strong Economy, a group that has published false attacks on for-profit college critics (including me).  Scimeca also spoke last week at a Department of Education public hearing and criticized proposals to create greater accountability for for-profit online program manager companies that get paid based on the number of students recruited.