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Looking West

Looking West
September 24, 2010

When the Higher Learning Commission of the North Central Association of Colleges and Schools this summer put major roadblocks in the way of two proposed takeovers of nonprofit colleges by for-profit investors, the accreditor's moves were seen by many as designed to "prevent the next Ashford," as more than one observer put it.

"Ashford" is Ashford University, which emerged in 2005 from what was then tiny (300 students), nearly bankrupt Franciscan University of the Prairies to become the foundation for a $700 million publicly traded company called Bridgepoint Education Inc. Ashford still offers courses on its rural Iowa campus, but all but 750 or so of its 45,000-plus students are enrolled online.

Ashford has in many ways become the poster child for the practice in which investors looking to gain a foothold in a higher education market that makes start-ups difficult seek a shortcut by taking over an existing institution and tapping into its existing accreditation. The Higher Learning Commission's actions this summer, regarding Dana and Rochester Colleges, were generally viewed as an attempt to make such "accreditation shopping" harder, at least in the north central swath of the country that the largest of the regional accreditors oversees.

College leaders inside and outside the region also saw the accreditor's actions, more generally, as indicating a desire by North Central's president since 2008, Sylvia Manning, to alter the agency's reputation as the regional accreditor most amenable to for-profit colleges.

Those developments (along with the intense pressure that federal regulators are putting on accreditors as gatekeepers of institutional quality and, by extension, access to federal financial aid) have led naturally to questions about how North Central will treat the for-profit colleges that it already accredits, including Ashford.

Which makes all the more noteworthy the fact that Ashford and its parent company, want to seek accreditation elsewhere -- specifically, from the Western Association of Schools and Colleges. Bridgepoint would be the second major for-profit higher education provider -- the other is Argosy University, part of the Education Management Corp. -- that has taken steps to leave the North Central association for the Western accreditor in recent months. (Note: This and several material in the article have been updated to correct an error of fact.)

Officials at the Western accrediting group acknowledged this week that Bridgepoint has formally applied for initial accreditation from WASC, citing in part the fact that the company's headquarters are in San Diego and that the vast majority of its students are in its online programs, which operate out of the headquarters. Bridgepoint, which also owns University of the Rockies, offered only a statement saying that faculty and staff at its institutions "continuously monitor accreditation processes in order to advance our institutions and to best serve our students." The statement acknowledged that "[b]oth institutions are watching all the policy changes that the Higher Learning Commission is proposing, as well as policies and processes of other regional accreditors."

The one formal policy change the Higher Learning Commission is weighing that could affect Bridgepoint would require an institution to have a "substantial presence" (including but not limited to a physical presence) in the agency's geographic region to be accredited by it -- and defines what that means in an increasingly complex era when national higher education companies have campuses and operations in many places (and, of course, offer many programs online).

Bridgepoint officials said in the company's most recent quarterly report to the Securities and Exchange Commission that the North Central accreditor's policy change could threaten the colleges' accreditation: "If the institutions were no longer accredited by an accrediting body recognized by the Department, they would be ineligible to participate in Title IV programs until they obtained accreditation by another accrediting body recognized by the Department, at which time they would need to file an application with the Department for reinstatement."

That assertion -- which appears in the section of the annual report in which companies lay out all potential threats to their viability, even if unlikely -- suggests that Bridgepoint is seeking a switch to the Western accreditor as a safety net, in case the changes in North Central's standards threaten its institutions' standing there. Manning, of the North Central accreditor, said the association did not wish to comment on the status of Ashford, other than to note that it is currently accredited.

But Bridgepoint's exploration comes at a time when the Higher Learning Commission and other regional accreditors are under intense scrutiny from the federal government about their oversight (or perceived lack thereof) of for-profit colleges in particular, and of higher education in general -- and are trying to show their muscle. This trend has been most evident at the North Central accreditor, in large part because it is home to more of the national higher education companies than any other regional agency, an outgrowth of the perceived willingness of Manning's predecessor, Steven D. Crow, to view for-profit institutions as legitimate when others declined to.

The apparent steps by the Higher Learning Commission to crack down on for-profit colleges -- and particularly that it is doing so, in the cases of Dana and Rochester, in ways that seem aimed at preventing more institutions from doing what Ashford did -- is likely to feed the perception that Bridgepoint is looking to escape a decreasingly hospitable situation.

Company officials declined to talk about their thinking beyond the statement above about the pending policy change at the Higher Learning Commission. And officials at the Western regional accreditor say that if Bridgepoint is in any way contemplating a move in search of an easier path to remaining accredited, it will be disappointed.

Ralph S. Wolff, president of Western's Accrediting Commission for Senior Colleges and Universities, confirmed Wednesday that Bridgepoint officials had formally applied for accreditation by the agency. "I don't make any judgment about whether the region-shopping element is part of the consideration" for Bridgepoint in exploring a move to the Western association, Wolff said in an interview. "What's really clear is that in the transition from Steve to Sylvia, there's been a different way" of reviewing for-profit colleges.

Bridgepoint's rationale for seeking a shift is "something we will closely look at," Wolff said, and the company will be required to show that there is an "adequate basis for jurisdictional presence," an argument it is likely to base on the fact that so many of its students are educated through the online program housed at its headquarters. But that is only one small part of what Wolff promises will be a rigorous review of Bridgepoint's institutions, part of the agency's broader reassessment of how it accredits for-profit colleges.

The Bridgepoint institutions will be "considered under the policy we developed ... for the initial accreditation of an institution accredited by a USDOE recognized agency other than WASC," Wolff said via e-mail. Under that policy -- which Wolff described in the interview as "one of several things we've done to address the potential of 'region shopping' " -- Bridgepoint, when its application is fully filed, "will need to establish first that it meets our WASC eligibility criteria (even though it is already accredited by HLC), and we will work with HLC to review their file on Ashford to make sure we understand issues that arose in their accreditation reviews of the university.

"After a successful eligibility review, there will be at least one visit to the university under the WASC standards (and possibly two) to ensure they meet them. As much of Ashford is online, we will develop a special protocol to 'visit' the online operations with both an onsite review in San Diego and online meetings, etc."

"It will be a very thorough review," Wolff added.

WASC did essentially a test run of that process this spring, he said, in reviewing an application by Argosy University to shift its regional accreditation from the Higher Learning Commission to the Western region. Argosy undertook that shift more than two years ago, its officials say, because it was absorbing Western State University College of Law, which was already accredited by WASC, and 5 of its 19 campuses are located in California. The Western association granted initial accreditation in June to Argosy's 19 campuses -- a decision contingent on approval from the U.S. Education Department -- and the regional accreditor is now reviewing separate applications from Argosy to absorb the Western law school and to integrate the eight Art Institutes of California into Argosy, Wolff said.

Craig D. Swenson, chancellor of Argosy, said in an interview Thursday that its departure from the Higher Learning Commission was motivated by strategic considerations -- including a desire to focus on the western United States -- rather than any concerns about North Central's direction. "Our relationship with HLC is solid," said Swenson, who participates on visiting teams for the accreditor and has been active within it. "I don't see any reason why we couldn't very happily and prosperously stay there."

The new standard of review used in the Argosy case included followup by Western on issues that had been raised in earlier reviews by the Higher Learning Commission, the use of a confidential e-mail account to solicit opinions from all faculty and staff at its campuses, and a thorough check of "all potential litigation" existing against the company, Wolff said. "At the end of the day, we feel like we'll have expanded our protocol for dealing with different kinds of for-profit institutions."

Recognizing the different issues posed to accreditors by multistate and highly financially complex for-profit colleges, WASC has also reexamined its eligibility criteria for new institutions (focused on issues such as what amounts to "sufficient presence" in the region) and expanded its review of all legal arrangements in which for-profit candidates for accreditation engage.

Wolff has also created a for-profit task force that is studying whether the agency needs a "separate protocol" for accrediting for-profit institutions, because "there's a lot we have to learn about these entities," from family-held small companies to publicly traded darlings of Wall Street. "When I, as a lawyer, think about how much I have to learn about the many [Securities and Exchange Commission] statements we look at, it's clear we all have a learning curve." Wolff said that the task force will discuss such things as whether the accreditor needs a "secret shopper" program that might send representatives undercover to institutions, much like the Government Accountability Office used to produce damaging videotaped footage played at a U.S. Senate hearing this fall..

Wolff says he and other accrediting officials are taking seriously the critiques leveled at them by federal regulators and members of Congress that they have inadequately monitored for-profit higher education. And he does not necessarily dispute the idea, put forward last year in a speech by then-Under Secretary of Education Bob Shireman, that accreditors lack the "firepower" to understand and assess the increasingly complex and savvy entities they are now charged with regulating.

"The public accountability mission [of accreditation] is something that we've not articulated as clearly as we might have," he said. "It's sort of a new mission for us, and it may be that we don't have enough firepower" to fulfill it, as is.

 

 

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