American Commercial Colleges, a for-profit higher education business in Texas, has agreed to pay the federal government up to $2.5 million to settle claims that it falsely certified that it was in compliance with certain requirements to receive federal student aid. A statement on the settlement from the Justice Department said that American Commercial Colleges had "orchestrated certain short-term private student loans" that the college repaid in order to appear to comply with the "90/10" rule. That rule requires that colleges seeking to participate in federal student aid programs receive at least 10 percent of their revenues from sources other than federal student aid. H. Grady Terrill, a lawyer for American Commercial Colleges, told The Lubbock Avalanche-Journal that he anticipated the institutions soon reapplying for authority to operate.
Alumni of the Thunderbird School of Global Management are protesting plans for the nonprofit business school to create a joint venture with for-profit Laureate Education. The joint venture would allow Thunderbird to set up programs at some of Laureate's network of campuses around the world. A petition signed by nearly 2,000 alumni says: "For-profit education may have its place, but it certainly does not align with the goals, culture or mission of Thunderbird. Furthermore, this selling out of the Thunderbird name will further dilute the brand, and as a result cheapen the value of the degree." The petition cites various investigations of for-profit higher education, and also questions why alumni were not consulted about the possible impact of the alliance on the reputation of their alma mater. Many of those posting comments on the petition cite concerns about for-profit higher education generally, not Laureate specifically, but argue that Thunderbird would be linked to the sector, not just Laureate. "When I tell people I got my M.B.A. from Thunderbird, I would like that to have meaning and not drawing comparisons to University of Phoenix," wrote one alumnus.
Thunderbird has created a webpage devoted to providing information about the collaboration and how it might help the institution. A spokeswoman said via e-mail that some of the criticisms of for-profit higher education made in the petition do not apply to Laureate. "We believe strongly that the Thunderbird-Laureate partnership is a strategic one that will enable Thunderbird to realize its academic mission while providing financial sustainability over the long term," she said. "The partnership with Laureate is a complex arrangement. We have been as transparent as possible about the partnership plans, within the constraints of the MOU. We look forward to sharing more information with our stakeholders, especially alumni, about the specifics of how this partnership will positively impact Thunderbird. We believe there will be even greater support when we are able to do so."
Capella University has received approval from its regional accreditor to proceed with a pilot program in competency-based education that does not rely on the credit hour standard, an approach called "direct assessment." The Higher Learning Commission of the North Central Association of Colleges and Schools approved the for-profit institution's "FlexPath" bachelor of science in business and master of business administration. University officials said the direct assessment tracks could reduce the cost of a degree and the time needed to complete it.
Historically black colleges urge Education Department to reconsider changes to some student loan criteria, and for-profit colleges and student advocates gear up for rewrite of "gainful employment" regulation.
A committee of a regional accreditor last week recommended that the University of Phoenix be placed "on notice," which is a lesser sanction than the probation a peer review team suggested earlier this year, the university said in a financial statement. The Higher Learning Commission of the North Central Association of Colleges and Schools is considering the university's 10-year bid for reaffirmation. The peer review team identified alleged governance problems at the university, including a lack of autonomy from its holding company, the Apollo Group. The university made subsequent changes in response to the report. The commission's Board of Trustees is scheduled to make the final ruling on the university's bid next month. The board gets the final call and is not required to take into account the report released last week by the commission's Institutional Actions Council First Committee.
Strayer University this summer will begin offering a scholarship under which undergraduates can earn a free senior year if they stick with their degree programs, the for-profit institution announced this week. Students will qualify for a free course credit for every three they compete, and can earn the full 25 percent discount on a degree as long as they do not take two consecutive quarters off. The "graduate fund" builds on a new tuition freeze and an existing, substantial scholarship program the university created last year. Several major for-profits have discounted their prices amid a general trend of declining enrollment.
A bill is dead to create a fourth college system in California to award credit and degrees to students but offer no courses, according to the head of the state Assembly's higher education committee.
The bill would have created the "New University of California," which would have issued credit and degrees to anyone capable of passing certain exams. The bill received criticism and news media attention even though it had an uphill battle to become law: its sponsor is Assemblyman Scott Wilk, a rookie Republican lawmaker in a Democratic-majority legislature.
“Of course we need to look at creating different paths for students to achieve college completion,” Das Williams, the Democratic chairman of the Assembly's higher education committee, said in a statement. “At the present time the author of the AB 1306 has decided to pull the bill. This bill, and others like it, must be closely reviewed and solution-oriented to ensure that they meet our state’s higher education goals and prepare our students for a robust career in the workforce.” A spokesman for Wilk did not immediately respond to an email seeking comment on the bill's fate.
The bill is just one of several across the country this year to suggest new models for graduating students. Another, which is sponsored by the leader of the California Senate, is still believed to be very much alive. It would require California's 145 public colleges and universities to grant credit for certain low-cost online courses offered by outside groups, including classes offered by for-profit companies.
In Florida, a measure is advancing that would allow Florida officials to accredit individual courses on their own -- including classes offered by unaccredited for-profit providers.