July 20, 2007

California’s Regulatory Meltdown

When a California bureau charged with regulating the state’s for-profit institutions closed down July 1, the concept of “state approval” became theoretical, if only for a short time. About 400,000 students are enrolled at the 1,600 or so institutions formerly approved by California’s now-defunct and, by all accounts, largely ineffectual Bureau for Private Postsecondary and Vocational Education – which oversaw such varied degree and non-degree granting institutions as Life University, which offers, among other programs, a doctor of “Oriental medicine in research advancement” degree; Oakland School of Law, the Academy of International Bartending and Casino Dealing, the Art Institute of California and the Coastal Trucking Institute. Some of the state-approved institutions offering degree programs are also accredited by national and regional agencies; some are not, and depend solely upon the state’s stamp of approval to prove legitimacy.

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Gov. Arnold Schwarzenegger signed a bill last week that extends such state approval authority for colleges that voluntarily agree to comply with the old state regulatory statute through January 31. But a longer-term solution being debated in the California Legislature faces a lot of opposition and a very uncertain future. And, in the meantime, advocates for institutions and students alike are facing some uncertain futures too.

Students, for one, looking for redress or quality assurance have few recourses during this interim in regulatory enforcement. “The students who were harmed in the past by misrepresentations — with no state agency, with no tuition recovery fund on the state level, they’re going to have no place to go,” said Betsy Imholz, special projects director for Consumers Union.

Meanwhile, a handful of smaller institutions that depend on state approval in order to ensure their students’ eligibility for professional licensure – California is unusual in allowing graduates from unaccredited, but state-approved, degree programs sit for licensure exams in most professional fields – are starting to consider the possibility of shutting down because they can’t guarantee their state approval (or a state approval system at all) will be there a year from now, Robert W. Johnson, executive director of the California Association of Private Postsecondary Schools, said in an interview.

It’s the small, unaccredited institutions that may be vulnerable in the absence of a state approval mechanism: Alan Contreras, administrator of the Oregon Office of Degree Authorization, said that 10 states, including Oregon, will not accept degrees from unaccredited colleges as credentials unless those colleges are approved by their respective states. California is one of a handful of states that plays host to a significant number of these unaccredited, but state-approved, private providers, Contreras said (Though most states have some, since all new colleges are unaccredited for a time). On the one hand, that’s not exactly a marker of quality: “Most states that get into that situation are in effect harboring diploma mills,” Contreras said, indicating that California, in particular, has a “history of a lot of substandard private providers.”

But while some state-approved institutions don’t apply for accreditation because they likely wouldn’t receive it, other small colleges, Contreras said, might avoid seeking it because of the cost.

“There are also some good, perfectly sound, unaccredited smaller colleges in California,” said Contreras.

A long-term legislative remedy, which replaces one regulatory body with another and maintains the consumer protections in the now inoperable current law, is facing resistance for a number of reasons, the most contentious centering upon which colleges are and aren’t exempt from state oversight based on their accreditation status; the complexity of the proposed statute; and a broad right to sue colleges for misrepresentation or fraud granted to students in the bill.

The debate over regulating the state’s for-profit sector is so complex it can become an easy target for oversimplification, with the discussion often hinging on accusations that the for-profit players, in particular the corporate chains, resist regulation and would prefer not to have a law or accountability at all. Meanwhile, the sector’s supporters shoot back that they do want effective, intelligible regulation, and that the plaintiffs’ lawyers advocating for students are simply looking for tools with which to more effectively sue.

The big, accredited for-profit players aren’t much affected by the lack of regulatory structure, having gotten assurance from the U.S. Department of Education earlier this year that their eligibility for Title IV federal financial aid funding wouldn’t be compromised in absence of the bureau’s oversight. “On June 30, as the act became inoperative, our president and CEO sent out a communiqué to the presidents of all of our California institutions, noting that it had happened, and his message was ‘Keep doing exactly what you’re doing.’ We’re not changing our mode of doing business, we continue on our own, irrespective of changes in the law, to continue to try to comply with the law as it existed,” said Mark Pelesh, executive vice president for legislative and regulatory affairs for Corinthian Colleges, a for-profit education company headquartered in California.

It’s the students and the small institutions, which have fewer resources to rely on and a lower tolerance for risk, who stand to potentially suffer, their respective supporters say. The stopgap law recently signed by Governor Schwarzenegger protects the eligibility of students at state-approved institutions to sit for licensing exams into 2008, but without a long-term solution in place, small institutions surviving or shuttering based on tuition revenue may have a tricky time recruiting students for multi-year degree programs, said Johnson of the association of private postsecondary schools, which represents California career colleges.

“If you’re a potential student and you’re looking at whether the law in California is going to be there… if I’m thinking a multi-year program, am I going to that school or to one in another state?” Johnson asked. Several smaller, state-approved colleges, with and without accreditation (though principally without) have approached him so far about possibly shutting down in this uncertain climate, he said. While unaccredited colleges are particularly worried about their students’ eligibility for licensing exams, small unaccredited and accredited colleges alike are worried about being sued for fraud if they admit students knowing their state approval could run out. Though Johnson advises them that he expects a legislative solution, if only an extension of the current stopgap law, he acknowledges the risk for small institutions “working on the margins.”

“Clearly, if you’re running a small school and you can’t guarantee that their degrees will still be approved in 2009 or 2010 if they graduate…if you enroll them [now], aren’t you taking the risk down the road of being sued for misrepresentation?” Johnson asked.

Inherent in that concern is not only the risk for the institution, but also the student. Collections for the statewide Student Tuition Recovery Fund, a safety net for students who can prove they’ve been ripped off, will cease, at least through the end of the year, under a provision of the short-term law recently signed. While the Department of Consumer Affairs (the department in which the former oversight authority was housed) is expected to accept complaints from students and continue to process claims already on file, student advocates wonder how effective that will be in absence of a staff devoted to the effort, and resources replenishing the pot.

Even the department’s official stance on the matter reflects that caveat. “We will continue to accept complaints and to the extent that we can, we will assist students, given the resources that we have, whether or not resources allow,” said Russ Heimerich, a spokesman for California’s consumer affairs department.

And, while a lot of the immediate concerns rightly fall to the fates of students and the relatively small proportion of California for-profits that are unaccredited, but state-approved, Oregon’s Contreras pointed out that, as state approval is a requirement for accreditation, accredited colleges applying for reaccreditation could also run into problems down the road if a long-term legislative solution isn’t found. So far, however, their eligibility for key state and federal programs remains perfectly intact. Their eligibility for Workforce Investment Act funds distributed through the state’s Employment Development Department will not be immediately impacted, Patrick Joyce, a spokesman for the department, said Wednesday. And Virginia Kice, a spokeswoman for U.S. Immigration and Customs Enforcement, confirmed that California institutions already certified to host foreign students through the Student Exchange and Visitor program will remain eligible, and subject to their scheduled two-year reviews as is typical practice.

Also among the immediate fears are concerns that the regulatory vacuum opens the door for California to return to its sad, 80s-era history of being a haven for diploma mills — even “the diploma mill capital of the world,” as some have put it. But, said Imholz, “It’s not just the fly-by-nights and the diploma mills, but the sector itself [that] needs comprehensive oversight.” A recent legislative hearing on this issue attracted testimony from multiple students from accredited colleges who shared tales of being tens of thousands of dollars in debt and short of that lucrative job offer they said they’d been told to expect. Without an oversight agency charged with mediating complaints and collecting information on degree completion and job placement rates, not only will these aggrieved students find little recourse for their complaints aside from the state’s more general anti-fraud law, Imholz said, but so will their ability to find out the facts and avoid getting into that situation in the first place be hampered.

“The temptations are great. It’s just too easy to fool people because they have dreams,” Imholz said. “You can sell dreams. It’s a classic con game. I’m not saying that every school engages in it or that every school engages to the same degree, but the temptations are too great to not have state oversight. And the dollars are too great.”

— Elizabeth Redden

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Comments

Uneven Playing Field

This complex issue deserves attention for another reason as well: for-profits in California and other states where they are similarly regulated are at a competitive disadvantage compared to those schools that are regionally accredited.

The Public institutions in California have avoided this mess only because they are protected by a powerful regional accrediting guild, and are largely unregulated when viewed in comparison with what is required on a yearly basis of the for-profits institutions. Public institutions are typically accredited only once every 10 years. That makes for a very uneven playing field.

The for-profit regulatory apparatus that is being debated functions as a de facto complaint bureau, whereas the monopoly of public colleges is protected from such interference by WASC. WASC’s primary function, in terms of its role as a guild, is to protect its members from just these kinds of grievances, which would otherwise subject the institutions to unwanted scrutiny and accountability.

Glen S. McGhee, Dir., at Florida Higher Education Accountability Project, at 8:35 am EDT on July 20, 2007

Can we get there from here?

“’There are also some good, perfectly sound, unaccredited smaller colleges in California, said Contreras.’”

I wonder if Alan is aware of the irony of his statement, and the corresponding implication that, ostensibly, he is in possession of substantive evidence to support it? Is it that being “good” and “perfectly sound” does not warrant accreditation? Perhaps accreditation is sufficiently cumbersome, obtuse, expensive, and fraught with flaws as to be operationally irrelevant, thereby marginalizing good institutions unable or unwilling to pursue it, while insulating the not-so-good that happen to have the resources to buy into it. Or — perish the thought – accreditation has been unmasked as little more than a self-serving, self-perpetuating guild, as an increasing number of its critics suggest.

The degree that any of these considerations reflect the reality of the situation brings shame to the higher education community, including state and federal agencies for maintaining this charade for so long. In fairness, I would argue that the regional accrediting agencies have not been sitting on their hands in this regard, and by way of example, the North Central Association’s Academic Quality Improvement Program (AQIP) is an honest and promising advancement over traditional processes. It is especially noteworthy that AQIP preceeded the creation, not to mention the findings of the Spellings Commission. There are many important differences inherent to this approach, not the least of which is that it changes the relationship from one of gatekeeping to that of continuing collaboration, with the emphasis on ensuring institutional progress rather than simply measuring metrics, often of questionable value.

As for Mr. Contraras’ assertion that the “good” and “sound” exist in California absent accreditation, I would be interested in knowing the basis for his findings – intuition, heresay, personal assessment? Of course, I am posing a tautological question. In truth, I doubt that Alan would base his opinion on such subjective considerations. Consequently, that leaves his determination of goodness and soundness resting on the findings of the now defunct California bureau that was generally, if not universally seen as ineffective. What we seem to have here is a state regulator being unwilling to recognize the standing of unaccredited institutions that, by his own admission are “good” and “sound,” unless those institutions are properly certified by another state regulator, the credibility of the latter notwithstanding. I would not presume to have ascertained the solutions identified by Spellings, but there isn’t much mystery with regard to the problems.

Russell Kitchner, Regulatory Consultant, at 8:55 am EDT on July 20, 2007

Mr. McGhee’s Soap Box

The first commentary from the Florida official is getting a bit repetitious and tiresome. In a couple of instances in the last few days this official has claimed that regional accreditation is a “guild.” Constantly making the claim does not make it so. In designing a regulatory mechanism for the state, California has wisely chosen to recognize the benefits of peer based accreditation. The notion that the process is a guild may be good rhetoric but it does not bear any relation to the facts.

The most recent reports on the benefits of regional accreditation versus state regulation are stunning in their clarity. For example, the most recent report looking at the efficacy of continuing to accept regional accreditation instead of creating a redundant path of state regulation commented that regionally accredited institutions had a record of “providing students with a high quality educational experience.”

On the other hand the state bureaucracy charged with accomplishing the same function for the non-accredited institutions had some serious issues. The Sacramento Bee reported in 2004 that the Bureau’s had a hard time living up to its statutory requirements. They commented, in part, “The Bureau 1) spends little time evaluating the quality of the education schools offer, 2) when it looks into complaints, it rarely conducts field investigation or follow- up, 3) it doesn’t monitor whether schools meet minimum graduation and job- placement rates required by law, 4) it is slow to process new school applications, allowing some to operate for years without permanent licenses.”

An internal review by the Department of Consumer Affairs a year later commented that the Bureau failed to fulfill basic responsibilities required by the statute, based on an audit. The Bureau did check for basic things like (estimated percentages of their failure to follow the law are in parenthesis) “a)Submission of a complete set of financial statements prepared in accordance with GAAP to include: Balance Sheet, Statement of Operations, Statement of Cash Flows, and Statement of Retained Earnings or Capital (100%), b) Financial report established whether the institution complies with financial responsibility criteria and financial resource requirements (75%) c) The institution had sufficient assets to provide educational services stated in its official publication (92%) d)Determination that officers, directors, and owner demonstrated financial and fiduciary responsibility (80%).”

WASC and the other regionals in the country are not state regulatory bodies but neither are they “guilds” as Mr. McGhee asserts. They are, in the tradition that Detocqueville first commented on in the 19th century, “public non-governmental resources.” There is a rationale for an effective role of state regulation. But there is an equally compelling rationale for the state to continue to recognize and utilize a non-governmental process for its regionally accredited institutions in order to allow it to concentrate its resources where there is a need.

Jonathan Brown, President at AICCU, at 9:55 am EDT on July 20, 2007

Put AQIP on the Web!

“Regional accrediting agencies have not been sitting on their hands in this regard, and by way of example, the North Central Association’s Academic Quality Improvement Program (AQIP)”

Other than taking your word for it, how do we know this is anything more than a publicity stunt to shore up waning confidence that the regional guilds serve the public interest more than the interest of their member institutions?

With demonstrations of quality control at regionally accredited institutions notoriously in short supply, very little can be said for certain about the QA/QC function at the regionals. (See J of HE article Trout: http://home.earthlink.net/~fheapblog/id22.html )

Doubtless, Alan is referring to some of the many small institutions certified by the California regulatory commission under discussion. Please note that these files are part of the public record. I’d like to see Russell say the same thing for AQIP. Better yet, why not put AQIP on the web?

Glen S. McGhee, Dir., at Florida Higher Education Accountability Project, at 10:15 am EDT on July 20, 2007

It’s called Google

The earnings report for Google this morning was a shameful $.03/share below investor estimates, perhaps largely due to folks who fail to utilize this option prior to making unfounded assertions.

It’s spelled A Q I P, and it’s all there Glen.

Russell Kitchner, at 10:35 am EDT on July 20, 2007

For-profit = Accountable

I wish I had more time for this but a meeting calls. So. . . reread McGhee’s comments and add:

1. California’s legacy was to make sure they didn’t have any diploma mills. The reality: over the years have spawned more mills than the rest of the states combined.

2. Anyone interested to learn the genesis of AQIP will see that it is a flattering knock-off of AQMS, the comprehensive process, outcome, and impact assessment system developed by the University of Phoenix in the late 1980’s. The DOEd and NCA were greatly influenced by AQMS via their intensive regulation of UOP. Anyone around at the time would conclude that they learned much more than they helped.

That said, AQIP is so watered down by compromise with the Mandarins that it is toothless. Ten years and AQIP is STILL not requiring schools to actually demonstrate continuous improvement through the use of empirical measures that have been conceptually grounded. AQIP has become what it sought to replace: bureaucratic puffery.

3. Many of the ills of higher education debated in this forum would be addressed through genuine progress toward defined goals (cf. the endless committees that lead nowhere with great deliberation) were all institutions of higher education required to establish a for-profit structure and meet defined financial goals by meeting the needs of their stakeholders. An actual profit is not necessary, just a defined revenue and margin target — something most universities don’t even know how to calculate. The requirements of for-profit structure provide persistent drumbeats for all that there is to mean by ‘quality’.

Robert Tucker, President at InterEd, Inc., at 11:00 am EDT on July 20, 2007

Evaluation Logic of Regional Accreditation

Michael Scriven, the father of modern evaluation sciences, has commented in many different fora that the evaluation logic of regional accreditation is the worst of all possible logics by which programs can be rationally assessed. John Sperling came pretty close to describing it when he quipped to a reporter, “The regionals are little more than faculty full employment guilds.”

Quit defending the process folks, you have no scientific legs to stand on. If you teach methodology, ask youself if you would accept the process in your own discipline.

Robert Tucker, President at InterEd, Inc., at 11:10 am EDT on July 20, 2007

How Oregon Determines Quality

Russell Kitchner asks whether Oregon relies on the California BPPVE evaluations or has done our own in order to determine that some unaccredited California schools are sound. We do our own.

Oregon has a process through which an unaccredited school based elsewhere can apply for and receive a “short-form” evaluation on certain basic criteria (mainly faculty qualifications, credit award policy, curriculum and admission standards)in order to allow its degrees to be legal for use in Oregon.

A list of the successful applicant schools appears on our web site at http://www.osac.state.or.us/oda/unaccredited.aspx. It includes six unaccredited California schools whose degree programs have met our minimum standards for unrestricted degree use in Oregon.

Alan Contreras, Oregon Office of Degree Authorization, at 11:45 am EDT on July 20, 2007

state officials

Two points:

The Florida Higher Education Accountability Project, is not a government agency. In fact, it seems to have only one employee (I don’t know if he is paid). So, to characterize Mr. McGhee as a state official is inaccurate.

Secondly, I appreciate the work that Mr. Contraras does, and his statements on here. And, as an actual state official he does good work for his state, in terms of keeping the diploma mills from spreading. Specifically, I believe that he protects people from wasting their time and money on such mills, because many uneducated people can’t tell the difference between a real school and a fake one.

However, I don’t think it is that difficult for educated people tell whether an institution is a diploma mill or not. In the fields with professional licenses, consumers can simply look to see whether a doctor, lawyer, dentist, veterinarian, accountant, etc. is licensed by their state. In other fields, the universe of “real” educational institutions is really small, and those people are generally hired by other graduates. So, for example, people with PhDs in philosophy are generally hired as philosophy professors (if they are lucky) by other PhDs, and you can be assured that they all know what constitutes an acceptable pedigree. If they see a school they don’t recognize, the resume gets trashed.

Larry, at 12:55 pm EDT on July 20, 2007

Relegating Guilds to the Past

In this discussion, we may have lost sight of the fact that the driver of accreditation for most institutions is student financial aid. We have no way to know for certain but the question is worth asking. How many institutions would choose to be accredited were their no financial advantage to doing so?

A few more questions seem worth asking in the light of today’s dialogue:

1. Why, exactly, do we need to make sure that diploma mills can’t spread? Do we need to do the same for bad restaurants, banks, and shoeshine stands?

2. If, as some of seem to agree, the regionals and professional accrediting bodies aren’t all that necessary in terms of protecting consumers from various kinds of fraud, what are they protecting? While the rhetoric is high minded, the behaviors sure seem like a guild to me. NLN and AACSB are two of many convenient examples in professional accreditation. SACS requirements for employing only full-time faculty whose degrees are in the exact subject they are teaching is another. But what about the fraud? It does exist after all, even if in miniscule quantities. Far simpler mechanisms than accreditation exist to manage fraud, starting with truth in labeling and scrutability of processes, and moving on to providing public access to ongoing results of process, outcome, and impact assessments. But wait!! Doing these things would adversely affect the protected class who do not believe they should be assessed by others. See the problem?

3. If we still think we need the regionals, by what processes should they assess the merits of schools under their aegis? I offer a partial answer to this question. The regionals already have logic in place to conduct such evaluations – they just ignore it. That logic is: (a) comprehend the institution’s mission and purposes and (b) determine how well the institution achieves them. This simple logic comprehends the fact that all definitions of quality – even those in higher education – rest essentially on “suitability to purpose” (quality FOR what?). Should we not focus our penchant for protecting the other guy on making sure that the institution: (a) faithfully and transparently positions itself in the market and (b) instantiates that position with appropriate practices and outcomes. None of that kind of evaluation logic would require guild-like standards or surreptitious behavior to make sure that only people who look like us are hired.

Robert Tucker, President at InterEd, Inc., at 3:00 pm EDT on July 20, 2007

It should be noted that SACS voted December 2006 to push their faculty standards to the margins of accreditation by relegating them to a “resource manual” as voluntary guidance (http://www.sacscoc.org/pdf/Proceedings-Spring-2006.pdf , pages 4 and especially 5. and more detail at the link below).

This is to be expected. Regional accrediting associations do what their members want and pay for, as they always have, and if dropping the QA controls on faculty credentials is what they want, then that’s what they get.

However, SACS is now struggling to regain control of dual enrollment courses that award college credit to high school students in Florida, and perhaps Kentucky. This is, as can be guessed, a massive project.The problem is that we have no idea how big a problem it is, although I have found that Richard M. Ingersoll’s UPenn research at the secondary level is transferable to postsecondary education.

Glen S. McGhee, Dir., at FHEAP, at 6:10 pm EDT on July 20, 2007

Shooting from the hip...

From reading the postings here, it is very obvious that most of you know nothing about the regional (WASC) accreditation process. You are greatly mistaken to claim that the regionals do what their members want and there are no quality controls (established outcomes and their measurements) in place. Before you post again about this subject, please peruse the WASC eligibility criteria and standards for operation. I speak with thirty years of in-the-trenches experience. Our small college pursued a change from national accreditation to being regionally accredited by WASC. It was a long and arduous process, but we became a much better institution as a result. For those of you still think there are no quality measures, outcomes or high standards demanded by WASC, consider this question: Given the many benefits of WASC accreditation and the fact that current law exempts all private WASC institutions from state oversight, why then are there only six for-profit WASC member institutions? There are hundreds of for-profit accredited colleges in California, with the all the benifits allowed, why have they chosen not to seek WASC accreditation? I know some can not meet the criteria and others do not want to try. It’s really that simple.

John Zimmerman, President at MTI College, at 4:00 pm EDT on July 21, 2007

Status Niches and Status Competition

A more nuanced approach is needed to fully account for the historical patterns of status niche emergence in US accreditation.

Such an approach would recognize historical and structural realities, and would not rely on institutional myths for explanation.

For example, there are federal laws against “accreditor hopping” which substantially limit accreditor choice. And, for those institutions that seek to change their status group, significant obstacles often prevent mobility. The case of FMU attempting accreditation with SACS is instructive ( http://home.earthlink.net/~fheapblog/id19.html ) regarding the preferential treatment given members so characteristic of guild behavior. Historically, SACS has resisted accrediting the “negro colleges,” junior colleges and vocational schools. This is a matter of record.

What is missing here is an account of the emergence of the status niches that the regional accrediting associations, such as WASC, sought to occupy. Without this badly needed account, there is no sense in relying on institutionalized accounts that are heavily sedimented and over-ridden with institutional dogma.

Just such a sociological approach would use the reality of institutional and accreditor status competition to tell us why SACS would not want to be associated in anyway with “negro colleges”. Other cognitive sociologists, such as Stephan Fuchs, propose to tell us why accreditor dogmas and hegemony continue to dominate large, aging cores.

Glen S. McGhee, Dir., at Florida Higher Education Accountability Project, at 9:05 am EDT on July 23, 2007

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