February 9, 2024

Questioned by Education Dept., Accreditor ACCSC Attacked Its Critics

Questioned by Education Dept., Accreditor ACCSC Attacked Its Critics

Faced with a directive from the U.S. Department of Education to defend its oversight of collapsed predatory college operation Center For Excellence in Higher Education (CEHE), the head of the accrediting agency ACCSC sharply attacked critics, saying their arguments were made “negligently” and were “unsupported by even a scintilla of the evidence.”

The fiery response, not previously reported, from ACCSC executive director Michale McComis, came in a January 2022 letter to Deputy Under Secretary of Education Jordan Matsudaira, after Matsudaira, in October 2021, informed ACCSC that the Department was delaying a decision on renewing ACCSC as a recognized accreditor. Department recognition is crucial for accreditors, because without it, schools accredited by an agency cannot participate in the federal student aid program.

Matsudaira wrote to McComis that he wanted more information about ACCSC’s monitoring, evaluation, and actions related to troubled schools, including the CEHE colleges.

Matsudaira’s action came after the Department’s outside advisory committee on educational quality, NACIQI, had in July 2021 rejected a recommendation by the Department’s accreditation unit that ACCSC receive the maximum five-year renewal period, and instead voted to support a three-year renewal. Some members of NACIQI, who include a range of education experts and college officials, pointed to ACCSC’s many years of accrediting schools with awful records of predatory practices and poor student outcomes.

A particular focus for some NACIQI members were the CEHE schools, which had faced repeated law enforcement actions for deceiving students, and also faced controversy for their questionable conversion from for-profit to non-profit status. ACCSC, critics argued, ignored or tolerated years of abuses at CEHE schools, including Independence University, CollegeAmerica, and Stevens-Henager College, before finally ending accreditation in April 2021, eight months after a Colorado judge, following a full trial, had found the company liable for deceptive practices.

Following ACCSC’s decision to terminate accreditation of CEHE-operated colleges, the Department of Education tightened controls on federal aid, and CEHE in August 2021 shut down all its schools. The Department also suspended CEHE’s CEO, Eric Juhlin, from federal contracting. CEHE is pursuing an appeal of the Colorado verdict and has sued the Department of Education for $500 million.

McComis’s January 10, 2022, response letter, recently obtained by the Century Foundation under the Freedom of Information Act and shared with Republic Report, insists that ACCSC did nothing wrong.

The McComis letter declared that “the narrative being spun during the NACIQI meeting about ACCSC’s oversight of CEHE-affiliated schools (1) is not new and has been negligently posited by advocacy organizations in the past, and (2) is unsupported by even a scintilla of the evidence. It is unfortunate that this specious narrative continues…”

“ACCSC did not accredit CEHE, rather, it accredited individual schools that were affiliated with CEHE,” McComis pointed out. “At various times, certain programs at individual CEHE institutions may have dropped below benchmark rates and, thus, a monitoring approach may have been imposed (e.g., Outcomes Reporting or Heightened Monitoring), and the program(s) may have subsequently: demonstrated improvement under such monitoring, been discontinued by the school, or been directed to cease enrolling new students by the Commission.”

“When the Commission determined a specific CEHE-affiliated school to be out of compliance with the Standards of Accreditation,” McComis told Matsudaira, “ACCSC took appropriate action, and provided a maximum timeframe for achieving compliance.”

“When a school closes,” McComis concluded, “it is tempting to armchair quarterback and point fingers in hindsight. The mountain of evidence presented here, however, demonstrates that there is simply no rational basis for rejecting and reducing the Department Staff’s recommendation.”

McComis’s letter dismissed NACIQI’s decision to recommend a three-year renewal, instead of five, as having been made “without articulating any basis in the regulations for its recommendation or any findings of noncompliance with any criteria.” He suggested that Matsudaira’s request for information “may stem, in part, from comments by one member of the NACIQI Committee and one commenter that seem to draw conclusions about whether ACCSC compliantly executed its role with respect to certain schools.” He said, “The statements made by both the Committee member and the commenter on this matter are conclusory, with the conclusions drawn based on only a scintilla of the record; as such, they are completely unreliable and under-informed opinions at best.”

I don’t know how much of the letter’s aggressive, decidedly un-humbled tone came from McComis himself and how much might reflect the input of lawyers accustomed to that style of rhetoric.

The NACIQI member that McComis seems to reference is former Deputy Under Secretary of Education Robert Shireman, now a senior fellow at the Century Foundation. Shireman certainly did raise concerns about CEHE and ACCSC at the July 2021 NACIQI meeting, and did urge a shorter renewal term for the accreditor — although another NACIQI member, Kathleen Alioto, also raised questions about ACCSC’s oversight of CEHE’s Stevens-Henager College, as well as of for-profits Full Sail University, Miller-Motte, Universal Technical Institute, and Lincoln Tech.

The “commenter”McComis describes may have been Marissa Navarro of the Center for American Progress, who offered an incisive statement, in her allotted three minutes at the NACIQI meeting, on ACCSC’s failure to act on problems at the CEHE schools — although two other public commenters, Barmak Nassirian of Veterans Education Success and Michael Izkowitz of Third Way, provided comments on the same day that were critical of ACCSC or supportive of a decision to delay re-recognition of the agency.

Then, about two months after the NACIQI meeting, a number of groups — Americans for Financial Reform Education Fund, Center for American Progress, New America, The Institute for College Access & Success, Third Way, and Veterans Education Success — plus this author, sent a letter to Secretary of Education Miguel Cardona calling on the Department to renew ACCSC for three years or less; we cited bad student outcomes at ACCSC schools, as well as the agency’s toleration of abuses at CEHE. (Matsudaira subsequently declined to consider our letter, dismissing it as tardy and lacking any relevant new information.)

McComis insisted in his letter that all these critics were wrong, describing his agency as proactively addressing problems at various CHE schools. He asserted that ACCSC “is the only oversight entity that has taken formal, impactful, and ongoing action against CEHE-affiliated schools.” He said that the Department of Education and other agencies “did not take meaningful institutional-level action related to the issues about which ACCSC is being questioned at any time before ACCSC withdrew the accreditation of Independence University.”

In reality, though, the abuses at CEHE schools have been apparent for more than a decade, and multiple law enforcement agencies had been pursuing these schools in the courts for years before ACCSC acted decisively.

In 2014, the U.S. Justice Department joined a whistleblower lawsuit against CEHE schools Stevens-Henager College, CollegeAmerica, and California College of San Diego, alleging the schools falsified student attendance records and grades, hired unqualified instructors, and paid their recruiters bonuses and commissions in violation of the federal ban on incentive compensation at for-profit schools. The Department of Education is a participant in such False Claims Act cases alleging federal student aid fraud. That case is still pending in federal district court.

That same year, the Colorado attorney general, after a two-year investigation, sued CEHE’s CollegeAmerica, alleging the school had deceptively marketed its degree programs, overstated the likelihood that a degree from the school would lead to good jobs, and sold its high-interest “EduPlan” loans as affordable, even though a larger percentage of borrowers were defaulting.  That case resulted in a $3 million verdict by state trial judge against the schools in 2020. The schools, the court concluded after an extensive trial, used a detailed playbook to manipulate vulnerable students into enrolling in high-priced, low-quality programs; directed admissions representatives to “enroll every student,” regardless of whether the student would likely graduate; greatly overstated starting salaries that graduates could earn; and falsely inflated graduation rates. The court’s decision, as noted, is still being appealed.

In 2019, court documents revealed that the federal Consumer Financial Protection Bureau was investigating CEHE schools over the EduPlan loans.

In 2019, also, the Colorado state agency overseeing for-profit colleges issued a notice of noncompliance for CollegeAmerica schools and, in January 2020, hit the schools with a cease-and-desist order.

In addition, in 2015, the New York Times had run a front-page article questioning the 2012 deal by which ultra-wealthy Carl Barney sold his for-profit colleges to CEHE, a tiny non-profit organization over which he had taken control, at an enormous valuation, allowing the schools to claim the regulatory and marketing advantages of being non-profit while allowing Barney to keep banking millions in taxpayer dollars.

McComis’s letter misleadingly dismisses the various law enforcement actions as failed or rejected by the courts. To be sure, these law enforcement actions have not yet been completed, but nor have they failed; instead, their conclusions have been delayed by aggressive legal tactics by CEHE, whereas ACCSC could have moved faster and more effectively to address the systematic bad behavior at the schools. ACCSC did repeatedly place various CEHE schools on probation over the years, but it was clear long ago that Carl Barney‘s schools were abusing students and did not deserve accreditation at all; they should not have been able to continue enrolling students eligible for federal aid. ASSCS, as the schools’ accreditor, was the gatekeeper for their receipt of that federal aid.

McComis was absolutely correct in one respect, however: The U.S. Department of Education, all along, had the power to terminate federal aid to the CEHE schools. It might have moved to do so sooner, however, if America had not elected the head of fraudulent Trump University as our president in 2016; he installed Betsy DeVos as education secretary, she staffed her higher education team with former for-profit college executives, and they moved to let the CEHE schools off the hook.

McComis’s letter also argues that much of the CEHE misbehavior described in the lawsuits happened many years ago, as far back as 2005, and that the Department of Education repeatedly renewed ACCSC’s status as a recognized accreditor over the years. I guess the point is that, if ACCSC is guilty of oversight failures, the Department of Education was complicit. That’s one hundred percent true. But it’s not a good answer for an accrediting agency that takes seriously its responsibilities to protect the interests of students and taxpayers.

Following the receipt of McComis’s letter defending ACCSC’s conduct, the Department delayed for almost another year and half, until May 25, 2023, its final decision on renewing ACCSC’s status. The Department’s decision, in another letter from Matsudaira to McComis, extensively criticized ACCSC, including for poor student outcomes at member schools and for failing to adequately and promptly address problems at CEHE schools. In the end, Matsudaira wrote, while he considered a finding of noncompliance, he ultimately decided to declare ACCSC in compliance. Yet he concluded that “certain of the agency’s practices seem to demand improvement,’ and he followed the NACIQI recommendation to renew ACCSC for three years instead of five.

Still, the practical effect of the long delay in the Department reaching that decision was that ACCSC essentially received a five year renewal, through 2026. The new Matsudaira letter was quietly deposited on an obscure Department web page with no public announcement or alert to advocates for students. Meanwhile, McComis spun the outcome to his member schools as a victory, saying in a memo that he was “pleased to announce” that the Department had again recognized ACCSC as “a reliable authority” and “extended ACCSC’s term of recognition to 2026,” without explaining that Matsudaira had scolded the accreditor and, at least formally, cut the renewal from three to five years. McComis told his members that the Department had found ACCSC “in full compliance” and “did have some suggestions for ACCSC’s ongoing consideration in regard to the assessment of student achievement which the Commission intends to consider….”

To be fair, McComis’s job, as the head of an accreditor overseeing a wide range of colleges, many for-profit, is a difficult one. He’s caught between the demanding, entitled school owners, such as powerful college magnate Arthur Keiser and Carol Palacios, whose Atlantis University was blatantly in violation of ACCSC and federal rules at the same time she served as literally the chair of ACCSC; and intermittently concerned government overseers; and the pesky critics who negligently spin narratives unsupported by even a scintilla of the evidence.

But the cynical, greedy CEHE college operation claimed thousands of victims — veterans, single moms, immigrants — who just wanted a chance to improve their lives, and were misled into paying high prices for substandard programs and ended up buried in debt. Despite McComis’s protests, ACCSC should have stood up to protect these students much, much sooner.

UPDATE 02-09-24 6:30 pm: After I posted this article, I received two emails worth sharing.

The first is from Utah lawyer Brandon Mark, one of the lawyers representing whistleblowers in the case against CEHE that was joined by the Justice Department. He writes, in part:

My clients are former employees of CEHE and were aware of CEHE’s internal practices and statements.  The case has been pending far too long (ten-plus years) but is likely to finally go to trial later this year or next. My information about ACCSC relates to this lawsuit.
Shortly after the lawsuit was unsealed and made public in 2014, I reached out to ACCSC’s Executive Director Mr. McComis to share information, along with documents and evidence, relating to how CEHE was violating a number of ACCSC’s accrediting standards. I also offered to have him interview my clients and other witnesses that we had been able to learn about concerning these widespread and fairly obvious accrediting standard violations.
I was terribly dismayed when not only did Mr. McComis express no interest in even considering the information and evidence that I was offering to share but rushed me off the telephone call as quickly as possible. Although I emailed him a copy of the Complaint, which identified a number of the accrediting standard violations, Mr. McComis never responded and never asked for any additional information from us, despite us making it clear we had a lot of additional information we wanted to share with him.
Quite frankly, I realized at that point that the accreditation system was completely broken and that “regulatory capture” was rampant in that system. The fact that it took ACCSC another decadeand only after ACCSC gave CEHE numerous opportunities to correct its actionsto finally remove CEHE’s accreditation speaks volumes.
Additionally, the grounds upon which ACCSC finally acted against CEHE were, to put it charitably, sanitized. ACCSC’s final actions, after years of probation, were based on structural problems relating to graduation and employment rates, rather than on the much worseand more obvious, if anyone lookedviolations of accrediting standards that reflect on the very integrity of the institution. Those violations were rampant and could have been readily confirmed, but it appeared that ACCSC had no intention of enforcing those kinds of standards.
From my admittedly limited perspective, low graduation and employment rates were merely the symptom of a completely rotten business model that relied on all sorts of violations of accrediting standards relating to the recruitment and enrollment of students, and had ACCSC acted earlier to correct those problems, the eventual employment and graduation problems and closure of the schools could have been avoided. But it appeared to me as if ACCSC had no desire to actually enforce its accrediting standardswhen we offered evidence of widespread violations by CEHE, the metaphorical door was slammed in our face.
Based on my experience with compliance programs, the very opposite approach is necessary. Indeed, an organization committed to compliance must have, at a minimum, (1) clear reporting mechanismsso that those with pertinent information can share it, and (2) a system for reviewing and vetting the tips that it receives through these mechanisms. ACCSC not only has none of these things (or, didn’t in 2014), but it was openly hostile to receiving information that one of its accredited schools might actually be violating its standards.
I have a hard time seeing how this “see no evil; hear no evil” approach to accreditation is consistent with ACCSC’s obligations to the Department.
I have been dismayed about the interaction I had with Mr. McComis for nearly a decade nowit still gnaws at me as a taxpayer to know how cavalier this supposed watchdog has been.

The other is from Debbi Potts, who from 2009 to 2012 was the director of the Cheyenne, Wyoming, CollegeAmerica campus. Potts sparred with CEHE in a series of legal disputes after she complained about abuses at the school, including contacting ACCSC in 2013 and later speaking with  the Colorado attorney general’s office, which then pursued the investigation that led to its lawsuit and the judge’s $3 million ruling. She writes:

I filed a huge complaint and laid out all the fraud that was not only in Cheyenne but was a systemic problem. Nobody contacted me to investigate; instead they sent me a letter saying, Nothing to see here, complaint closed !! A campus director files a huge complaint with practically a map attached and they do nothing. That’s why the AGs had to be summoned. So ridiculous !!….
McComis would never answer my phone calls after they dismissed my huge complaint…