This letter was prepared in response to a request for comments, published in the Federal Register on February 13, 2017, regarding the continued federal recognition of the Distance Education Accrediting Commission, through which some online colleges gain various privileges including access to federal financial aid.
Dear Members of the National Advisory Committee on Institutional Quality and Integrity and Staff of the Accreditation Group of the U.S. Department of Education’s Office of Postsecondary Education:
Thank you very much for the opportunity to submit public comments regarding the application for renewal of recognition of the Distance Education Accrediting Commission (DEAC), pursuant to 82 FR 10479. As detailed below, there is considerable evidence suggesting that DEAC has not effectively fulfilled its responsibilities as a gatekeeper of federal student financial assistance. As a result, many institutions accredited by DEAC have received significant federal funding while employing practices contradictory to federal regulation and, based on the available data, demonstrating poor student outcomes. Not only have individual students suffered due to DEAC’s lax oversight, but taxpayers have also had to pay. It is now time for the National Advisory Committee on Institutional Quality and Integrity (NACIQI) to hold DEAC accountable for its performance and demand significant reforms to protect students and taxpayers in a timely manner.
Lack of Student Outcomes Data Makes Adequate Assessment Impossible
In 2014, the Government Accountability Office called on ED to strengthen its oversight efforts by, among other things, “comparing accreditor sanction data with Education’s information on student outcomes, to inform its recognition reviews.” A focus on student outcomes in ED’s monitoring and recognition of accrediting agencies was part of efforts announced in 2015 and made more concrete by the recent release of key student outcome measures by accreditor.
However, in regards to DEAC, the ED outcomes data currently available do not enable a meaningful assessment of its comparative performance, nor do they shed light on its effectiveness in ensuring that the education provided by its institutions meets acceptable levels of quality. Specifically, of the 12 Title IV DEAC institutions included in ED’s performance data, graduation and repayment rate data are available for just three institutions, while one has a graduation rate and another has a repayment rate. In other words, only 25 percent (3) of DEAC’s institutions have data on these two key indicators of student outcomes, and just 42 percent (5) have any available data at all. Moreover, two institutions that receive a combined 41 percent of all Title IV funds among DEAC schools—Grantham University and Allied American University—have no data for either metric. Tapping into the College Scorecard for retention rates reveals that only six DEAC schools report such data.
Where data are available, the schools do not excel. The six DEAC schools for which retention rate data is available perform below the national average (68 percent), including the second largest Title IV DEAC school, Grantham University, with a 27 percent rate. Despite this low retention rate, Grantham University was awarded renewal of accreditation without conditions for a five-year period in February 2017. Among the five DEAC schools with graduation and/or repayment rate data, American Business and Technology University and the National Paralegal Institute have the lowest graduation (31 percent and 37 percent, respectively) and lowest repayment rates (22 percent and 34 percent, respectively), but the highest average net price ($21,215 and $13,997, respectively) and the highest median completer debt ($19,000 and $21,526, respectively). Despite these very poor student outcomes and high cost, both institutions were found to meet or exceed DEAC’s standards in recent years and had their accreditation renewed for a five-year period without any conditions.
Evidence Indicates Lack of Substantive Oversight
Although few DEAC schools participate in ED’s Title IV student financial assistance programs, virtually all participate in either the Department of Defense’s (DOD) Training Assistance (TA) and Military Spouse Career Advancement Account (MyCAA) programs, or in the GI Bill administered by the Department of Veterans Affairs (VA). The two schools that are the largest DEAC-accredited Title IV recipients are among the top 10 schools with the largest number of GI Bill students in the nation: Columbia Southern University and Grantham University. These schools are also among the 10 schools nationwide that received the most TA funding in FY 2011, while two other DEAC-accredited entities, Allied Business Schools and Penn Foster Education Group, earned this title among recipients of MyCAA dollars.
A review of student complaint information published by DOD and VA reveal the following:
- DEAC’s American Business and Technology University had the highest GI Bill student complaint rate in the nation.
- Five DEAC schools (Penn Foster College, Allied Business Schools, Lakewood College, Allied American University and Columbia Southern University) were among the institutions with the most service member complaints, as released by DOD for FY 2014. Allied American University, which is now closed, was placed on probation by DoD in 2014. Columbia Southern University was awarded renewal of accreditation without conditions for a five-year period in 2016.
- Two DEAC schools (Martinsburg College and Lakewood College) were among the institutions with the most service member complaints, as released by DOD for FY 2015. DEAC awarded both schools renewal of accreditation without conditions for a five-year period in 2014.
According to its website, DEAC accredits just 57 degree-granting institutions in the U.S., which makes the above lists even more alarming in terms of its share of schools receiving such a high number and/or rate of complaints by service members and veterans. Under 20 U.S. Code § 1099b (a)(5)(I), accrediting agencies must have standards that assess their schools’ “record of student complaints received by, or available to, the agency or association.” Moreover, under 34 CFR 602.23 (c)(3), an accrediting agency must “review in a timely, fair, and equitable manner any complaint it receives against an accredited institution or program that is related to the agency’s standards or procedures.” Given the findings above, DEAC should be asked to explain whether these complaints were disclosed and what actions it took, if any, to determine their validity and severity.
A sample review of additional sources also uncovered numerous instances of improper behavior or violations of federal and state law by DEAC institutions:
Ashworth College
In 2015, Ashworth College settled deceptive marketing charges levied by the Federal Trade Commission (FTC). According to the FTC, the school “misrepresented to students that they would get the training and credentials needed to switch careers or get a new job, and that the course credits they earned would transfer to other schools” when, “in reality, many of its programs failed to meet state requirements for desired careers, and the claims made about credit transfers were often not true.” Despite enrolling more than 35,000 students at the time and boasting that “93 percent of students report achieving their goals after completing their studies,” the college could not afford to pay the $11 million fine.
DEAC renewed Ashworth’s accreditation in 2014.
Penn Foster College
In 2014, CBS News reported that Penn Foster College was involved in an alleged scheme through which “a marketing company made huge profits to secretly funnel military students to an unaccredited college at a wildly inflated cost to taxpayers,” described in unsealed court documents and uncovered by a whistleblower.
In 2015, the Oregon Justice Department ordered Penn Foster College to refund a former student’s tuition and to change its claim about accreditation, after misleading students about its accreditation and transferability of credits. The student filed a complaint after Portland Community College refused to accept Penn Foster credits, although Penn Foster claimed on its website that it had regional accreditation and transferable credits. Penn Foster was ordered to refund the student’s tuition, pay the cost of the investigation, make a $50,000 donation to organizations serving disadvantaged youth, pay restitution to legitimate complaints by other misled students, and be truthful in its advertising.
In 2016, DEAC awarded Penn Foster College renewal of accreditation without conditions for a five-year period.
Heritage College
In November 2016, all 10 campuses of the for-profit Heritage College abruptly closed, leaving thousands of students without degrees and few options to continue their studies, despite repeated assurances to students and employees that the school would stay open. Heritage, which was “behind on its bills and staring down multiplying lawsuits from disgruntled faculty,” including “a 2011 lawsuit from former employees that say Heritage…falsified grades and other records in order to pocket their college loans.” The school was owned by “Fort Collins used car dealer Earl Weston,” who is also the owner of two other DEAC schools, McKinley College and U.S. Career Institute.
Heritage College closed, but not before paying six-figure salaries to its executives in the months prior to declaring bankruptcy, including $507,000 to Weston.
Ellis University
Citing “substantive and pervasive problems at the institution related to administrative oversight, integrity, planning and budgeting, financial and human resources, and the oversight of teaching and learning,” the Higher Learning Commission revoked the accreditation of Ellis University in 2008.
DEAC, however, continued to accredit Ellis until 2015 when it ordered a show cause. Ellis University finally closed at the end of 2016.
DEAC Must Be Held Accountable for its Schools’ Troubling Records
Under 20 U.S. Code § 1099b(a)(5)(E) and (G), accrediting agencies must have standards that assess their schools’ “fiscal and administrative capacity as appropriate to the specified scale of operations,” and “recruiting and admissions practices, academic calendars, catalogs, publications, grading and advertising.” DEAC should be asked to explain whether it was aware of the information described above and what actions it took, if any, to determine their validity and severity, especially in regards to violations of its accreditation standards.
The institutions identified here have not been subject to any adverse actions in recent years. Quite the contrary: with the exception of the now-closed Ellis University and Allied American University, which also closed in December, all other institutions remain operational and have been either initially accredited or awarded multi-year renewals without conditions as they were found to “meet or exceed each of the Commission’s standards for accreditation.” During the 2013-2016 period, just two institutions were denied accreditation by DEAC.
The numerous compliance problems and violations, high rates of student complaints, as well as poor outcomes, related to several DEAC schools raise serious questions and concerns about DEAC’s effectiveness and performance “as a reliable authority regarding the quality of the education or training provided by the institutions or programs it accredits,” as required under 34 CFR 602.16 (a), especially when considering the relatively small number of schools the Commission accredits. At a minimum, it is critical for DEAC to answer key questions, such as whether it was aware of the above information, whether it inquired to obtain more information from the schools involved, and whether and how it used such information in exercising its responsibilities under federal law as a recognized accrediting agency. If DEAC was aware of the compliance issues, ED should examine how DEAC used the information in its reviews of accreditation requests and/or in its decisions to renew accreditation without any conditions for multiple years.
Further, while DEAC serves a Title IV gatekeeper for a small number of schools, it also serves as a gatekeeper for other educational programs that require recognized accreditation as a condition of participation, including those administered by the VA and DOD, as indicated above. Moreover, it is important to note that accreditation is the only permittable educational standard under the State Authorization Reciprocity Agreement (SARA), which includes 47 states and the District of Columbia. Through this agreement, 21 DEAC-accredited institutions—including six that do not participate in Title IV—enroll over 43,000 students in 43 states. Thus, a review of DEAC’s standards and performance should not be limited to its Title IV schools and it is critical for the Accreditation Group to look closely at the broader set of DEAC-accredited institutions. DEAC’s responsibility is to ensure that its schools meet acceptable levels of quality, regardless of whether they participate in Title IV.
We appreciate the opportunity to comment on DEAC’s application.
Spiros Protopsaltis, Ph.D., Contributing Author
Robert Shireman, Senior Fellow, The Century Foundation
Appendix
| Appendix A: DEAC Schools that Received Title IV in AY2016-17 Q1, Not Included in ED Dataset |
| Name |
Loans |
Pell |
Total |
DEAC Category |
OPE ID |
| Sonoran Desert Institute |
$257,160 |
$416,652 |
$673,812 |
Degree Granting |
04244900 |
| International Sports Sciences Assoc. |
$44,941 |
$63,305 |
$108,246 |
Postsec. School |
04243400 |
| Gemological Institute of America |
$29,778 |
$65,659 |
$95,437 |
Postsec. School |
02231900 |
| Catholic Distance University |
$30,857 |
|
$30,857 |
Degree Granting |
04124200 |
| Appendix B: DEAC Non-Title IV Postsecondary Schools Participating in VA and DOD Programs |
| Name |
GI Bill |
TA |
MYCAA |
| Ashworth College |
X |
|
X |
| At-Home Professions |
X |
|
X |
| Blackstone Career Institute |
X |
|
X |
| Gemological Institute of America |
X |
|
|
| Institute of Logistical Management |
X |
|
|
| International Sports Sciences Association |
X |
X |
X |
| Modern Gun School |
X |
|
|
| National Tax Training School |
X |
|
X |
| New York Institute of Art and Design |
|
|
X |
| New York Institute of Photography |
X |
|
X |
| Penn Foster Career School |
X |
|
X |
| U.S. Career Institute |
X |
|
X |
Tags: higher education, for-profit colleges, college accreditation
College Regulator Proves Asleep at the Wheel
This letter was prepared in response to a request for comments, published in the Federal Register on February 13, 2017, regarding the continued federal recognition of the Distance Education Accrediting Commission, through which some online colleges gain various privileges including access to federal financial aid.
Dear Members of the National Advisory Committee on Institutional Quality and Integrity and Staff of the Accreditation Group of the U.S. Department of Education’s Office of Postsecondary Education:
Thank you very much for the opportunity to submit public comments regarding the application for renewal of recognition of the Distance Education Accrediting Commission (DEAC), pursuant to 82 FR 10479. As detailed below, there is considerable evidence suggesting that DEAC has not effectively fulfilled its responsibilities as a gatekeeper of federal student financial assistance. As a result, many institutions accredited by DEAC have received significant federal funding while employing practices contradictory to federal regulation and, based on the available data, demonstrating poor student outcomes. Not only have individual students suffered due to DEAC’s lax oversight, but taxpayers have also had to pay. It is now time for the National Advisory Committee on Institutional Quality and Integrity (NACIQI) to hold DEAC accountable for its performance and demand significant reforms to protect students and taxpayers in a timely manner.
Lack of Student Outcomes Data Makes Adequate Assessment Impossible
In 2014, the Government Accountability Office called on ED to strengthen its oversight efforts by, among other things, “comparing accreditor sanction data with Education’s information on student outcomes, to inform its recognition reviews.”1 A focus on student outcomes in ED’s monitoring and recognition of accrediting agencies was part of efforts announced in 20152 and made more concrete by the recent release of key student outcome measures by accreditor.3
However, in regards to DEAC, the ED outcomes data currently available do not enable a meaningful assessment of its comparative performance, nor do they shed light on its effectiveness in ensuring that the education provided by its institutions meets acceptable levels of quality. Specifically, of the 124 Title IV DEAC institutions included in ED’s performance data, graduation and repayment rate data are available for just three institutions, while one has a graduation rate and another has a repayment rate.5 In other words, only 25 percent (3) of DEAC’s institutions have data on these two key indicators of student outcomes, and just 42 percent (5) have any available data at all. Moreover, two institutions that receive a combined 41 percent of all Title IV funds among DEAC schools—Grantham University and Allied American University—have no data for either metric. Tapping into the College Scorecard for retention rates reveals that only six DEAC schools report such data.
Where data are available, the schools do not excel. The six DEAC schools for which retention rate data is available perform below the national average (68 percent), including the second largest Title IV DEAC school, Grantham University, with a 27 percent rate.6 Despite this low retention rate, Grantham University was awarded renewal of accreditation without conditions for a five-year period in February 2017.7 Among the five DEAC schools with graduation and/or repayment rate data, American Business and Technology University and the National Paralegal Institute have the lowest graduation (31 percent and 37 percent, respectively) and lowest repayment rates (22 percent and 34 percent, respectively), but the highest average net price ($21,215 and $13,997, respectively) and the highest median completer debt ($19,000 and $21,526, respectively). Despite these very poor student outcomes and high cost, both institutions were found to meet or exceed DEAC’s standards in recent years and had their accreditation renewed for a five-year period without any conditions.8
Evidence Indicates Lack of Substantive Oversight
Although few DEAC schools participate in ED’s Title IV student financial assistance programs, virtually all participate in either the Department of Defense’s (DOD) Training Assistance (TA)9 and Military Spouse Career Advancement Account (MyCAA)10 programs, or in the GI Bill administered by the Department of Veterans Affairs (VA).11 The two schools that are the largest DEAC-accredited Title IV recipients are among the top 10 schools with the largest number of GI Bill students in the nation: Columbia Southern University and Grantham University.12 These schools are also among the 10 schools nationwide that received the most TA funding in FY 2011, while two other DEAC-accredited entities, Allied Business Schools and Penn Foster Education Group,13 earned this title among recipients of MyCAA dollars.14
A review of student complaint information published by DOD and VA reveal the following:
According to its website, DEAC accredits just 57 degree-granting institutions in the U.S., which makes the above lists even more alarming in terms of its share of schools receiving such a high number and/or rate of complaints by service members and veterans.21 Under 20 U.S. Code § 1099b (a)(5)(I), accrediting agencies must have standards that assess their schools’ “record of student complaints received by, or available to, the agency or association.” Moreover, under 34 CFR 602.23 (c)(3), an accrediting agency must “review in a timely, fair, and equitable manner any complaint it receives against an accredited institution or program that is related to the agency’s standards or procedures.” Given the findings above, DEAC should be asked to explain whether these complaints were disclosed and what actions it took, if any, to determine their validity and severity.
A sample review of additional sources also uncovered numerous instances of improper behavior or violations of federal and state law by DEAC institutions:
Ashworth College
In 2015, Ashworth College settled deceptive marketing charges levied by the Federal Trade Commission (FTC). According to the FTC, the school “misrepresented to students that they would get the training and credentials needed to switch careers or get a new job, and that the course credits they earned would transfer to other schools” when, “in reality, many of its programs failed to meet state requirements for desired careers, and the claims made about credit transfers were often not true.”22 Despite enrolling more than 35,000 students at the time and boasting that “93 percent of students report achieving their goals after completing their studies,” the college could not afford to pay the $11 million fine.23
DEAC renewed Ashworth’s accreditation in 2014.24
Penn Foster College
In 2014, CBS News reported that Penn Foster College was involved in an alleged scheme through which “a marketing company made huge profits to secretly funnel military students to an unaccredited college at a wildly inflated cost to taxpayers,” described in unsealed court documents and uncovered by a whistleblower.25
In 2015, the Oregon Justice Department ordered Penn Foster College to refund a former student’s tuition and to change its claim about accreditation, after misleading students about its accreditation and transferability of credits.26 The student filed a complaint after Portland Community College refused to accept Penn Foster credits, although Penn Foster claimed on its website that it had regional accreditation and transferable credits.27 Penn Foster was ordered to refund the student’s tuition, pay the cost of the investigation, make a $50,000 donation to organizations serving disadvantaged youth, pay restitution to legitimate complaints by other misled students, and be truthful in its advertising.28
In 2016, DEAC awarded Penn Foster College renewal of accreditation without conditions for a five-year period.29
Heritage College
In November 2016, all 10 campuses of the for-profit Heritage College abruptly closed, leaving thousands of students without degrees and few options to continue their studies, despite repeated assurances to students and employees that the school would stay open.30 Heritage, which was “behind on its bills and staring down multiplying lawsuits from disgruntled faculty,” including “a 2011 lawsuit from former employees that say Heritage…falsified grades and other records in order to pocket their college loans.” The school was owned by “Fort Collins used car dealer Earl Weston,” who is also the owner of two other DEAC schools, McKinley College and U.S. Career Institute.31
Heritage College closed, but not before paying six-figure salaries to its executives in the months prior to declaring bankruptcy, including $507,000 to Weston.32
Ellis University
Citing “substantive and pervasive problems at the institution related to administrative oversight, integrity, planning and budgeting, financial and human resources, and the oversight of teaching and learning,” the Higher Learning Commission revoked the accreditation of Ellis University in 2008.33
DEAC, however, continued to accredit Ellis34 until 2015 when it ordered a show cause.35 Ellis University finally closed at the end of 2016.36
DEAC Must Be Held Accountable for its Schools’ Troubling Records
Under 20 U.S. Code § 1099b(a)(5)(E) and (G), accrediting agencies must have standards that assess their schools’ “fiscal and administrative capacity as appropriate to the specified scale of operations,” and “recruiting and admissions practices, academic calendars, catalogs, publications, grading and advertising.” DEAC should be asked to explain whether it was aware of the information described above and what actions it took, if any, to determine their validity and severity, especially in regards to violations of its accreditation standards.
The institutions identified here have not been subject to any adverse actions in recent years. Quite the contrary: with the exception of the now-closed Ellis University and Allied American University, which also closed in December, all other institutions remain operational and have been either initially accredited or awarded multi-year renewals without conditions as they were found to “meet or exceed each of the Commission’s standards for accreditation.” During the 2013-2016 period, just two institutions were denied accreditation by DEAC.37
The numerous compliance problems and violations, high rates of student complaints, as well as poor outcomes, related to several DEAC schools raise serious questions and concerns about DEAC’s effectiveness and performance “as a reliable authority regarding the quality of the education or training provided by the institutions or programs it accredits,” as required under 34 CFR 602.16 (a), especially when considering the relatively small number of schools the Commission accredits. At a minimum, it is critical for DEAC to answer key questions, such as whether it was aware of the above information, whether it inquired to obtain more information from the schools involved, and whether and how it used such information in exercising its responsibilities under federal law as a recognized accrediting agency. If DEAC was aware of the compliance issues, ED should examine how DEAC used the information in its reviews of accreditation requests and/or in its decisions to renew accreditation without any conditions for multiple years.
Further, while DEAC serves a Title IV gatekeeper for a small number of schools, it also serves as a gatekeeper for other educational programs that require recognized accreditation as a condition of participation, including those administered by the VA and DOD, as indicated above. Moreover, it is important to note that accreditation is the only permittable educational standard under the State Authorization Reciprocity Agreement (SARA), which includes 47 states and the District of Columbia. Through this agreement, 21 DEAC-accredited institutions—including six that do not participate in Title IV—enroll over 43,000 students in 43 states. Thus, a review of DEAC’s standards and performance should not be limited to its Title IV schools and it is critical for the Accreditation Group to look closely at the broader set of DEAC-accredited institutions. DEAC’s responsibility is to ensure that its schools meet acceptable levels of quality, regardless of whether they participate in Title IV.
We appreciate the opportunity to comment on DEAC’s application.
Spiros Protopsaltis, Ph.D., Contributing Author
Robert Shireman, Senior Fellow, The Century Foundation
Appendix
Notes
https://www.insidehighered.com/news/2015/05/27/federal-trade-commission-charges-ashworth-college-deceptive-marketing.
http://www.kshb.com/news/local-news/heritage-college-another-for-profit-closes-how-to-avoid-being-scammed.
http://www.businessden.com/2016/12/13/bankrupt-heritage-college-grossed-50m-in-months-leading-up-to-bankruptcy/.
Tags: higher education, for-profit colleges, college accreditation