February 28, 2024

Advisory Panel Ratifies Education Dept.’s Weak Decision on Accreditor’s Failed Oversight of Corrupt College


Advisory Panel Ratifies Education Dept.'s Weak Decision on Accreditor's Failed Oversight of Corrupt College

At its meeting today, NACIQI, the U.S. Department of Education’s outside advisory committee on accreditation policy, voted 12-2, after a debate, to endorse the Department staff recommendation of a 29-month renewal of recognition for accreditor Council on Occupational Education (COE). The opposing votes came from NACIQI vice chair Zakiya Smith Ellis, who was formerly New Jersey’s Secretary of Higher Education, and Robert Shireman, former U.S. Deputy Under Secretary of Education. Several other members who voted yes expressed strong concerns about COE’s conduct but suggested that the accreditor and the Department might have learned lessons from the process and could take more steps to improve. 

Today’s debate and vote came in the wake of evidence that COE had failed to detect blatant misconduct at one of the schools it has overseen, Florida Career College (FCC).

In April 2020, I wrote an article about a lawsuit against FCC, alleging the school targeted students of color with deceptive high-pressure sales and left them with overwhelming debt. I was soon contacted by numerous FCC staff. They described abuses: blatant rigging of ability to benefit exams, luring prospective students with false promises of jobs, and admitting students whose disabilities, or criminal convictions, would prevent them from obtaining the jobs they sought.

One employee said, “It’s worse than you can ever imagine.” Another called FCC “the most corrupt institution I have ever seen in my life.”

I published a report, the Department of Education’s Federal Student Aid office investigated, and it found extensive evidence of violations. Last year the Department announced it would remove FCC from federal aid. This month, it reached an agreement under which the company’s CEO resigned.

What did COE do? Apparently nothing until May 2020, when it placed FCC on “Apparent Deficiency” status — the weakest penalty status the accreditor offers. After that, it deferred action on renewing FCC, until the school voluntarily withdrew last month.

In October 2021, ratifying NACIQI’s recommendation at a meeting a few months earlier, the Department told COE it had one year to improve its compliance, including as to complaints of fraud and criminal activity at FCC.

Reviewing FCC’s response, the Department’s accreditation unit staff found this year that COE was in compliance with Department rules and recommended recognition be renewed for two years, five months – which sounded like half the maximum, but, with the delays in the process, that added up to the same five-year period that the best-performing accreditors receive.

Herman Bounds, who runs the Department of Education’s accreditation unit, explained during the debate at NACIQI today how, in his view, it would be practically difficult to renew COE for less than the 29-month recommendation, because the whole cycle of renewal has such a long lead time. Bounds was correct, to a point, but it’s a sad reality that the system is so poorly equipped to deal with blatant failures.

Bounds allowed that, if he were COE, he might have put FCC on “probation,” status, a stronger sanction than “Apparent Deficiency,” but he said that was just one person’s opinion.  Kind of.  Bounds is indeed one person, but a person whose opinions, if operationalized, could compel much stronger fidelity by accreditors to the rules, and thus much stronger protections for students and taxpayers against abuses. His opinion as to what COE should have done calls into question his staff’s decision to find COE in compliance. 

COE has a new executive director, Kirk Nooks, who started in May 2023, and he asserted at today’s meeting that the accreditor has learned from the experience and is making changes. But he also defended COE’s lack of prompt or firm action under his predecessor, Gary Puckett, saying that when it investigated in response to the student and employee allegations of abuses, it obtained “opposing evidence,” including “sworn statements” from students and employees, and it commissioned two independent auditors who found FCC in compliance.

Two NACIQI members who have regularly opposed efforts to hold accreditors accountable for abuses by particular schools — Arthur Keiser, operator of chains of for-profit and non-profit colleges, and Jennifer Blum, a higher education industry lawyer — reprised their familiar roles.

Keiser, who was the chair of NACIQI in the Trump years, stressed that COE accredits hundreds of schools and contended that FCC is “the only outlier.” Blum, similarly, insisted that FCC was “just one institution.” She said there was no “trend line of issues with COE.”

Keiser and Blum ignored the possibility that other COE-accredited schools might be engaged in bad behavior and just haven’t been caught — that COE’s lax oversight of FCC might be indicative of a larger failure. 

Suggesting that FCC might not be the only bad apple in COE’s barrel, Smith Ellis mentioned one troubling, now-shuttered COE school, Vista College, which I also highlighted in my public comment at the meeting. The school, which had bad outcomes for many students, shut down suddenly, leaving students’ futures in doubt. COE didn’t seem to have had a problem with the school.

Keiser declared, as always, that accreditors are “not a police force.” Sure. They are, however, charged with placing on schools a seal of approval, a seal that entices students both on its own and because it brings with it eligibility for federal student grants and loans. And an accreditor is responsible for not placing that seal on a school unless it has ensured that the school is complying with some basic standards of quality and integrity. COE wholly failed at that task when it came to FCC.

Keiser insisted that “in some respects” the triad – the higher education oversight regime that includes the Department, state agencies, and accreditors – “worked” in the case of FCC.

It’s true that the Department’s Federal Student Aid enforcement unit, once it was handed strong evidence of abuses by the lawsuit, my article, and whistleblowers, did launch a major probe and acted firmly. (Whether the Department would have done so under Donald Trump and Betsy DeVos, who gutted the investigative unit and generally did the bidding of for-profit college owners like Keiser — probably not.) But the other parts of the triad — the Florida state agency, CIE, and accreditor COE — did little but stand by and see how the Department’s enforcement action would shake out; CIE’s vice chair, who has been running their meetings, even cheered on FCC and suggested they were being railroaded. And it wasn’t any part of the triad that initially detected or exposed the abuses at FCC — it was the students, their lawyers, and me. 

Keiser admitted that what had occurred at FCC was “horrible,” without mentioning that the school had long been a member of the for-profit / career college industry lobby group CECU, where Keiser has for decades sat on the board of directors. CECU kept FCC as a member even though the school had, in the past, been raided by the FBI and investigated by the Department of Education after undercover agents observed FCC recruiters “engaged in activities that included coaching students to lie about high school graduate status, income, and tax filing status, as well as producing fraudulent high school diplomas.”

In the end, Arthur Keiser fell back on his favorite tactic: impugning those who disagreed with him. In the past, he has insisted, without evidence, that the criticisms of some career colleges — including the schools he owns and operates — are “personal” or “political.” This time he said that when for-profit colleges (he called them, as always, “proprietary schools”) are at issue, that surfaces all kinds of “emotions.”  Keiser said he had “a hard time” with all that. He pointed out that there were problems at a troubled community college, Eastern Gateway in Ohio. I have long had concerns about Eastern Gateway, but how much more blatantly could someone try to change the subject?

Keiser, in the end, declared the FCC case “a unique situation” and urged his fellow NACIQI members to let COE off the hook and “move on from this topic.” 

Keiser’s fervent desire to move on from this unusual era in which some people have the temerity to cite evidence about bad-acting colleges when evaluating accreditor performance may be rooted in his deep reverence for the traditional ways people have done things in higher education. It might possibly also be connected to an ongoing process wherein the Department of Education has directed the accreditor Southern Association of Colleges and Schools (SACS) to provide a report on its “oversight of the potential conflicts of interest and tax issues surrounding the transition from the for-profit Keiser University to the not-for-profit Everglades College and University.” Keiser University is the self-named crown jewel of Arthur Keiser’s college empire

Keiser also falsely suggested that the only problems found at FCC related to ability-to-benefit (ATB) testing, and fellow panelist Jennifer Blum, while acknowledging that there were multiple categories of abuses at FCC, said that ATB was the main problem and implied that COE’s failures were not so blatant because the ATB process is “complex.” But the findings of the Department’s enforcement team were not about some arcane interpretation of the ATB regulations – it was about, as my sources also alleged, blatant rigging of entrance exams for high school non-graduates in order to increase FCC’s student enrollment and access to taxpayer dollars. 

As I said in my comment today to NACIQI, the Department’s enforcement action showed that FCC was long engaged in violations and should not have been accredited. COE did not detect these abuses and, once they were exposed, did not promptly deal with them. That indicates COE’s standards were not effective and not effectively implemented.  If there aren’t real consequences for such accreditor failures, then the system is failing.

A Senior Department Official to be designated will review the accreditation unit and NACIQI recommendations for a 29-month, aka maximum five year, renewal for COE.  Despite the logistical obstacles, a one-year renewal would send to COE and other accreditors a much more appropriate message.