At a public hearing Thursday in Orlando, Florida, executives of troubled for-profit Florida Career College (FCC) suggested that U.S. Department of Education officials might be amenable to finding an alternative to their recent decision to cut off federal student grants and loans to the school. The Department announced on April 11 that it was terminating FCC’s certification to receive federal aid, citing evidence that “FCC broke federal rules,” including rules governing ability-to-benefit (ATB) tests taken by some students without a high school diploma in order to gain admission to college.

Allegations that there was regular cheating on ATB tests at FCC were first reported in an article on this website in May 2020. 

At Thursday’s meeting of the state agency overseeing for-profit colleges, the Florida Commission for Independent Education (CIE), (watch here), Tim Moscato, Regional VP of Operations at Florida Career College, presented FCC’s application to renew its license to operate in the state. He was joined by Sanjay Sardana, Executive VP and CFO  of International Education Corporation; Aaron Mortensen, Senior VP and  General Counsel at IEC; and other IEC/FCC officials.

Addressing the Department of Education’s decision to terminate aid, Moscato said that “IEC and FCC respectfully but vehemently deny” the Department’s claims that the school violated ability-to-benefit rules by manipulating student testing results. And he told the CIE at the outset that the situation with the Department “may include an alternative resolution of the denial.”

Moscato noted, accurately, that the Department  had accepted FCC’s request to extend the proposed cutoff date for federal aid from September 30 to January 31. Moscato said FCC sought the extension to “minimize the impact” for students and allow them to complete their programs. He said the decision to extend would impose “significant cost to FCC.” He claimed that as of mid-May, 90 percent of FCC students were still attending class, which he said “speaks to the quality” of FCC programs. 

Moscato complained that the Department did not provide FCC and IEC leadership with an administrative hearing before the decision. 

Moscato continued, “Though it was after the fact, the Department did recently agree to host a meeting with IEC senior leaders. The meeting took place on May 12, 2023, in Washington DC. It was productive, and IEC was able for the first time to share its side of the story. We believe Department officials now know more about who we really are, which is an organization genuinely committed to student success, with integrity and that complies with all regulations and standards.”

Moscato then suggested that, at the meeting, Department of Education officials signaled a willingness to soften their decision.  “During the meeting,” he said, “Department officials expressed an openness to working together to identify a resolution, something less extreme than shutting down FCC. They also indicated they’d be willing to continue discussions at another meeting following the submission of FCC’s official request for consideration.”

Moscato said FCC submitted its request for reconsideration to the Department earlier this week, and sent a copy to the Florida commission. He said the submission included “exhibits and sworn declarations from more than 285 witnesses including former ATB students, proctors, and current and former employees.”

The Department of Education did not answer my request to comment on the representations Moscato made at the Florida hearing and to provide a copy of FCC’s request for reconsideration.  FCC did not respond to a similar request.

Moscato then sought to refute the allegation that FCC facilitated significant cheating on the ATB test. He said that FCC contracted with an “unaffiliated” company to provide test proctors. He said the Department had alleged just a few dozen instances of proctors “helping” students during the ATB test. He said the Department then inferred from these instances “some sort of widespread scheme” by FCC. Moscato insisted the evidence did not support that case.

Moscato said FCC had conducted some 45,000 ATB tests over seven years, and that the Department alleged that just eleven test takers were assisted by proctors. He also said that the failure rate from ATB test takers at FCC – 19,000 failed out of 45,000 tests – was  consistent with the national average, suggesting that FCC did not have a cheating problem. 

Moscato cited repeated successful visits to FCC campuses by accreditor Council on Occupational Education (COE) and by CIE. He stated that a 2015 Department of Education review had been “successfully closed.” He said that FCC’s performance on key federal measures of quality were strong — its cohort loan default rate was zero, and that its 90-10 rule compliance was at 74 percent.

Moscato said FCC excels in quality measures and has a culture of compliance – with an ethics hotline and student grievance procedures. “We don’t claim to be a perfect organization,” he said – FCC has “human beings who occasionally make errors,” but, he said, the school has a no-tolerance policy for violations.

Moscato insisted that the ATB issues were “not systemic” and denial of Title IV aid is “vastly out of proportion to the circumstances.” Moscato added, “We hope to hear from the Department soon with their response.”

IEC CFO Sarvana told the commissioners that the company is financially sound and has a strong cash position.

Thursday’s CIE meeting was being run by Tra Williams, the commission’s vice chair, an official with FleetForce Truck Driving School in Winter Haven. 

At the end of Moscato’s presentation, Williams seemed to endorse FCC’s position. “Well said, sir,” he began. He continued, “I’ve been following this personally and applaud your vigor and your adamance in your defense.” Addressing the Department of Education’s decision, Williams said, “It was a disproportionate response, and it makes me curious about how that transpires.” He said that the  “data supports that this was not systemic.” 

He asked whether “IEC has to have a long term cliff where they have to look at what it costs to fight the DOE… is there a long-term marathon commitment to a reversal,” or, he said, do you make a deal where you “take it on the chin,” but still continue to operate.

“I personally know what it’s like,” the CIE vice chair told the IEC/FCC officials, “to facilitate opportunity for people and then be vilified for that.”

Sarvana responded, “We are confident from the meeting we had with them [the Department of Education] that this will turn around in our favor.”

But Williams did express concern when he learned that FCC’s monthly expenses were precisely as large as their flow of federal aid – a precarious position. He urged the school to “mitigate your dependence” on the federal dollars. 

The CIE members then voted to renew FCC’s annual state license, on a provisional basis with certain conditions. 

After the vote, vice chair Williams told the IEC/FCC team, “Go fight the good fight, guys.”

Notwithstanding vice chair Williams’ admiring response, Moscato and FCC’s presentation to CIE in fact distorted the record in multiple ways.

First, it’s not true that the May 12 DC meeting was when IEC “was able for the first time to share its side of the story.” The Department’s April 11 letter transmitting its decision to FCC notes that in October 2022 the Department sent FCC a summary of its evidence and that the next month FCC sent the Department an extensive letter defending its conduct.

Second, Moscato’s argument that widespread ATB cheating at FCC was unlikely because its test failure rate was similar to the national average is undermined by a fact the Department pointed out in its April 11 letter: IEC’s schools, remarkably, have around 75 percent of all Title IV-aided students enrolled via ATB test; IEC dominated the data. In addition, other for-profit colleges have been caught cheating on ATB tests, and their wrongs don’t make FCC’s misconduct right, or unlikely. 

Third, whistleblowers who spoke with Republic Report for our 2020 article, some of whom later spoke with Department of Education investigators, did allege there was systematic ATB test cheating at FCC, and the Department findings include strong evidence that FCC employees were involved.

One former FCC admissions staff member told me the school’s testing process “is highly compromised… I’ve seen countless students who speak very little English pass this test via doctored test scores by … proctors.” Another former staffer described the ATB testing at FCC as “corrupt as hell” — the school used paper testing, the employee said, because it’s easier to falsify; school officials coach the students during exams; proctors change answers. Another employee said that a corporate trainer told proctors to instruct students to answer the questions they knew and leave the rest blank, so that proctors could more easily fill in the missing answers. A proctor who refused was terminated. One FCC education manager who expressed concerns about the enrollment, and suspicious entrance exam successes, of non-English speakers was soon fired.  

The Department’s April letter documents evidence of ATB misconduct by FCC officials and staff, not just the proctors they hired: IEC and FCC leaders tracked proctor pass rates and picked the ones they wanted; FCC officials pressured proctors to pass students; and campus leaders looked the other way as FCC employees and proctors engaged in improper communications.

Fourth, our prior reports on FCC, the Department’s findings last month, and evidence revealed through a lawsuit brought by Black former students alleging FCC targeted them for predatory recruiting, all reveal numerous examples of additional misconduct at the school, beyond the ATB cheating — undermining Moscato’s claims that FCC has a strong culture of legal compliance. 

Our 2020 articles focused on FCC’s Orlando campus. According to former employees there, FCC’s recruiters found homeless people in strip mall parking lots and lured them to campus by giving them hot dogs. They tricked others into campus visits by claiming they were offering job interviews.

The former employees told me FCC admitted students whose physical and intellectual disabilities prevented them from doing the jobs they trained for, including a student whom the school enrolled in a dental assisting program even though she was legally blind and couldn’t adequately see inside patients’ mouths. The school also enrolled students whose convictions for violent crimes made them ineligible for positions they sought; and students who didn’t speak English, even though the programs were only in English.

One ex-employee told me Florida Career College was “the most corrupt institution I have ever seen in my life.”

In the lawsuit brought by former FCC students, then-IEC vice president Bob Adler made a number of telling admissions in a deposition, including that: FCC recruiters cold call people who may have been looking on job training websites and have never expressed interest in attending the school; FCC instructs admissions representatives to emphasize “urgency” in a prospective student’s need to enroll; FCC makes no effort to determine whether prospective students have criminal records that may prevent them from obtaining the jobs they are training for; FCC has no policy for rejecting applicants who lack a high school diploma or GED and are unwilling to take a qualifying test; FCC admissions representatives are not required to verify English language fluency, even though the school’s programs are in English; FCC financial aid staff provide students with documents showing the loans they have signed up for only “on request’; and FCC does not follow up to ensure that its graduates are employed in the field for more than one week.

In declarations the students’ lawyers have submitted in the case, former FCC employees report egregious abuses at the school.

Former FCC admissions representative Twyla Prindle said that: many prospective students did not understand the costs of the programs they were enrolling in, and could not afford them; prospective students who did not want to enroll were pressured into talking with at least three FCC representatives before they could leave campus; FCC enrolled students whom it knew would not be able to jobs in their fields, such as students with criminal records and students with intellectual disabilities; FCC admissions representatives were yelled at by supervisors for failing to meet enrollment quotas; and  FCC’s Jacksonville admissions director would pressure black students to enroll, but would provide white students recommendations for other options.

A former FCC loan collections officer, Howard Glantz, declared that: FCC’s financial aid process during enrollment was rushed, and a high percentage of FCC students did not understand what they owed; FCC collections staff were paid bonuses based on how much they collected from students; the purpose of FCC’s high-pressure collections process was to help FCC meet its legal obligation to maintain at least 10 percent of its revenue from sources other than federal aid; and FCC faculty falsified class attendance records, vouching for students who were not actually there.

The Department’s April 11 letter also describes additional misconduct: IEC and FCC leadership pressured recruiters to meet enrollment targets, resulting in harms to students; again, FCC employees falsified school attendance records; FCC made false statements to accreditors; and IEC/FCC coached employees on what to say if asked questions by Department officials, prior to a March 2022 Department visit to campus — conduct that the Department labels “Interference in the Department’s Investigation.” 

Given all these findings of abuses, FCC’s presentation to the Florida CIE regarding its conduct was deceptive. Whether its representations to the Commission regarding a likely change of course by the U.S. Department of Education were appropriate remains to be seen. 

To stress a point we have made before: Colleges have no entitlement to a permanent flow of federal aid dollars.  They are essentially federal contractors, getting taxpayer money to perform services that are supposed to benefit the people of this country. And the task they are entrusted with performing is a critical one — helping people build better lives through education. The standard for removing them should not be effectively raised to the standard we use to convict someone of capital offenses. If a school’s performance is weak, if it engages in misconduct, it is harming students and ripping off taxpayers, and the Department of Education has not only the right but the obligation to remove that school from the federal aid program.

UPDATE 05-29-23:

At a May 23 meeting, the Accrediting Commission of Career Schools and Colleges (ACCSC), accreditor of some of the campuses of the IEC-owned schools UEI College and United Education Institute, voted to place International Education Corp on “System-Wide Warning” status, with a subsequent review set for ACCSC’s August meeting. ACCSC cited the evidence contained in the Department’s findings regarding Florida Career College that senior IEC leaders knew of and encouraged the ATB test cheating. ACCSC also asserts that IEC did not inform it of the Department investigation in a timely manner, as the accreditor’s standards require. ACCSC notes that IEC says it has voluntarily halted ATB testing and enrollment at UEI College and United Education Institute; the accreditor’s May 23 order includes a requirement that such testing and enrollment be suspended. ACCSC directed IEC, by July 6, to reply in writing to a series of requests for information and records. (Other UEI College and United Education Institute campuses are accredited by a separate organization, Accrediting Council for Continuing Education & Training (ACCET), which does not seem to have taken a similar action against the schools.)

The FCC representatives did not mention to the CIE at the May 26 meeting, as far as the livestream indicated, that ACCSC had taken this action.

Since June 2021, FCC has been on “Notification of Apparent Deficiency” status with its accreditor, the Council on Occupational Education (COE). COE has provided this explanation for placing FCC on this status: “Non-compliance with conditions, standards, and/or criteria of the Commission.” In 2020, after I published my first report on FCC, COE’s executive director, Gary Puckett, told me the agency was investigating issues at the school. In October 2021, the U.S. Department of Education informed COE that it had one year to improve its own compliance with Department regulations, including that COE “must demonstrate that it has meaningfully engaged with its obligations … to enforce its accreditation standards with respect to complaints of fraud and criminal activity at Florida Career College.”

COE, at its March 2023 meeting, deferred a decision on renewing FCC’s accreditation. COE lists FCC on its June 2023 docket for consideration of renewal. [UPDATE 07-27-23: At its June meeting, COE deferred a decision on renewing accreditation for FCC.]

UPDATE 06-15-23:

Florida Governor Ron DeSantis (R) announced today he has vetoed more than $120 million in line items for education funding, including $400,000 appropriated for “Student Expense Assistance Program” at Florida Career College. 

UPDATE 07-27-23:

At a meeting today of the Florida Commission for Independent Education, FCC’s Tim Moscato said the school was “still seeing students successfully complete their programs.” Asked ab0ut FCC’s appeal of the Department of Education’s cutoff of student aid, FCC’s Aaron Mortensen said “We continue to have conversations” with the Department of Education “and believe that we’re making progress in that regard.” Asked about teach out plans, Mortensen said FCC had “made significant progress” on those plans, but that because federal student aid will be available through January 2024, and the school anticipates “graduating the vast majority of students” by then, that impacts teach out plans — meaning FCC thinks they don’t need extensive teach out plans.