During a 13-year period starting in 2008, the Accrediting Commission of Career Schools and Colleges (ACCSC) raised concerns more than 30 times that colleges affiliated with CEHE were potentially failing to meet standards for quality, honesty, and other attributes crucial to students and taxpayers alike. And yet, CEHE never fixed the vast majority of these problems. ACCSC was not the only one to find problems or take action. A state agency and several federal government agencies also alleged wrongdoing by the colleges—including an accusation from the U.S. Department of Justice about illegal recruiting practices. More months and years passed. Meanwhile, officials with one of the colleges blamed the problems on the “ethnic culture” of students.1
Last year, a Colorado judge ruled that colleges operated by CEHE had knowingly engaged in deceptive practices, misleading students about graduates’ earnings, job opportunities, and ability to repay loans provided by the colleges.2 Finally, in April 2021, more than a dozen years after concerns were first raised about campuses in the chain, ACCSC pulled the plug on CEHE by withdrawing accreditation—the seal of approval that makes the colleges it oversees eligible for federal student aid funds. Yet the colleges under the corporation already had received a collective $1.8 billion in federal grants and loans since 2008.3
This is a story about how a system that is supposed to guard higher education against poor quality and fraudulent colleges can actually work as designed and yet utterly fail students and taxpayers alike. The Center for American Progress has documented, step by step, 13 years of actions and troubling findings from ACCSC that fell short of true accountability. As evidenced by the timeline in this issue brief, despite overwhelming evidence, it took far too long to pull the plug on CEHE, leaving tens of thousands of students in harm’s way.
Across the United States, accrediting agencies provide students and the colleges that enroll them with access to $120 billion each year in taxpayer dollars.4 These agencies are tasked with “gatekeeping,” a process to determine whether a college is deemed of sufficient quality; but they rarely revoke a college’s accreditation once approved.
This issue brief looks at the rules guiding accrediting agencies and details the long list of actions to examine how an accreditor could ostensibly follow all its rules in overseeing an obviously troubled chain of schools without putting a stop to the company’s waste and abuse until far too late. While regulations require accreditors to take action and give colleges a defined amount of time to improve or risk losing accreditation, there are a variety of loopholes that allow accreditors to get around this requirement.
To be fair, accrediting agencies are not the only ones responsible for quality oversight. The U.S. Department of Education and states also play a role in approving colleges; and in the case of CEHE and others like it, neither has kept their end of the bargain. Clearly, there is ample room to improve oversight at all levels.
But the example of ACCSC’s oversight of CEHE also raises questions about whether accrediting agencies are up to the job. Given accreditors’ track record, the federal government should be drastically strengthening requirements for and expectations of them. Yet the laws have remained largely the same for decades. And last year, new regulations from the Trump administration significantly weakened the rules, giving accreditors and colleges more time, purportedly, to fix problems when they are not living up to their promises and failing students.5
Moving forward, Congress and the Biden-Harris administration should seek to strengthen the rules for accrediting agencies, take aggressive action to ensure that the colleges causing serious concerns are not allowed to continue collecting taxpayer money and enrolling students, and, above all, make sure that students enrolled in CEHE—and the many colleges like it—are entitled to relief.
The Center for Excellence in Higher Education was not always a company that operated colleges. From 2007 to 2012, it functioned as a public nonprofit charity in Indiana that focused on higher education and philanthropy.6 However, on December 31, 2012, CEHE merged with for-profit corporations Stevens-Henager College—which included Independence University, CollegeAmerica Denver, CollegeAmerica Arizona, California College San Diego, and California College—as well as College America Services Inc., which provided management and operational support to each of the chains. Combined, this included a total of 16 campuses with physical locations in Arizona, Idaho, Wyoming, Utah, and Colorado.7
A higher learning hierarchy
In 2013, CEHE operated 16 colleges that were accredited by ACCSC.8 In the corresponding timeline, actions against a main campus includes its branch locations.9
California College of San Diego
- CollegeAmerica Fort Collins
- CollegeAmerica Colorado Springs
- CollegeAmerica Cheyenne
College America Flagstaff
- CollegeAmerica Phoenix
- Stevens-Henager College, Idaho Falls
Stevens-Henager College, Ogden/West Haven (now Independence University)
- Stevens-Henager College, Orem
- Stevens-Henager College, Murray
- Stevens-Henager College, Boise
- Stevens-Henager College, Logan
- Stevens-Henager College, St. George
- Independence University (online)
Many of these campuses have since closed or are in the process of closing. In fact, Independence University is the only remaining institution that was not in the process of closing when ACCSC withdrew accreditation.10
The merger with CEHE was not a big change for the colleges: Both before and after the merger, they were essentially operated by the same person, Carl Barney.11 Prior to the merger, Barney was the owner and sole shareholder of each of the individual corporations. After the merger, he maintained effective control of the colleges. Barney was ultimately responsible for creating the advertising, lead generation, and enrollment practices at the colleges, along with all other practices and policies guiding them.
Before the merger, CEHE was already an IRS tax-exempt organization. After the merger, it filed a routine request to be categorized by the IRS as a tax-exempt educational organization, a move that led the colleges to claim themselves as nonprofit while potentially avoiding regulations and taxes.12 The Department of Education initially denied the change but later settled in court and eventually classified the colleges as nonprofit in 2018. The underlying operations of the colleges did not fundamentally change.13
Colleges operated by CEHE made most of their money from low-income students and students of color, many of whom never graduated. According to court documents, among students enrolled at CollegeAmerica programs, 40 percent were minority, particularly Black and Latino; 68 percent were women, many of whom were single mothers; and, at the Denver campus, 80 percent were federal Pell Grant recipients, which means they qualified as having exceptional financial need.14 More than 60 percent of students at the chain would not graduate, and only 16 percent paid down a single dollar on the principal of their federal loans three years after leaving.
From 2012 onward, as the timeline details, a Colorado state agency and multiple federal agencies continued to raise flags concerning operations at CEHE colleges. In September 2019, CEHE announced it was stopping enrollments at all physical locations to shift its focus online, noting at the time that it was not closing campuses.15 But CEHE ultimately changed course, and by July 2020, it had decided to close campuses before all students had finished their programs.16 Following these closures, in October 2020, CEHE completed consolidation of the former main campus, Stevens-Henager College of West Haven, Utah, and the online branch, Independence University (IU), into one entity, making IU the only campus not in the process of closure. In 2019, before the closures, these colleges together served about 2,100 students at physical locations and another 10,000 online.17
By the time ACCSC withdrew accreditation, IU was the only fully operating CEHE college.18 Six additional campuses—under the names Stevens-Henager, California College San Diego, and CollegeAmerica—were operating in “teach-out” status, each with less than 100 students yet to complete their programs. At this point, these colleges were in the process of closing and would do so once all of their students completed their programs or transferred.
IU can, and has indicated it will, appeal the ACCSC decision.
Requirements under federal law and regulation
Accrediting agencies are voluntary, independent membership associations that serve as the gatekeepers to federal student aid dollars. While the Higher Education Act (HEA) has specific requirements on what criteria an accreditor must consider when it evaluates a college—such as facilities, finances, and student outcomes—it is unclear what an agency must do when a college does not live up to those standards.19 Instead, the legislation is focused on ensuring due process for the institution before an accreditor acts to remove accreditation. For example, the HEA requires that agencies provide sufficient opportunity for an institution to respond to the accreditor about any deficiencies identified, the opportunity to appeal an action to remove accreditation, and the right to representation and participation by counsel during an appeal. In other words, it is designed to protect the institution from an unfair judgement that might cause it to lose accreditation.
Because accreditation provides colleges with access to federal aid, loss of accreditation would very likely mark the beginning of the end for a school’s existence. So, a focus on due process is understandable. However, there are no similar protections for accreditors when they take action, nor are there protections for the students attending colleges that are not up to standard.
Following an unsuccessful appeal, institutions can—and do—take accrediting agencies to court. And while the accreditors usually win, fighting legal battles takes up valuable time and money.20 Accrediting agencies are small nonprofits, funded by colleges’ membership dues, with fewer staff and less funding devoted to oversight than what colleges’ corporate owners can devote to fighting back. For comparison, in a year, ACCSC’s stamp of approval authorized $2.3 billion in federal financial aid to 398 colleges, while the agency spent slightly more than $7 million overseeing colleges.21 The focus on due process in legislation and the threat of a court battle can make agencies reluctant to act swiftly; and this is one area that will need to be changed over the long haul.
Federal regulation provides a bit more clarity and generally requires that if an institution or program fails to meet standards, the accrediting agency must provide them with a timeline for coming into compliance or risk losing accreditation. Yet the Trump administration introduced new regulations, which went into effect in 2020, that significantly weakened these standards.22 Previously, agencies were required to take immediate action to withdraw accreditation or provide time to come into compliance within a maximum of two years, depending on the program length.23 The new regulations, however, doubled the maximum timeline to four years, specifying that the agency must have a policy in place that allows it to immediately withdraw its stamp of approval when warranted.
Still, even with the maximum timeline of two years prior to the regulatory change, actions taken by ACCSC against CEHE demonstrate that noncompliance can and does occur over periods much longer than that; and even then, the agency did not withdraw accreditation. That is because each accrediting agency has a series of actions it can take when an institution is not in compliance with standards, based on the severity of noncompliance. Lower-level actions often do not have a standard timeline for compliance, and when they do, an agency might remove the action for demonstrated improvement, even if the college is not in full compliance. This flexibility allows accreditors to give troubled colleges practically unlimited time, supposedly, to work on improvements—even though those improvements often never fully materialize. As the timeline below shows, on several occasions, ACCSC issued a sanction indicating significant concerns, only to remove the sanction or dial it back to a lesser action a few months later. And in the case of CEHE, it was clear based on ACCSC’s actions that the colleges it oversaw were not in compliance with the agency’s own standards for close to a decade.
To add a layer of complexity, each accrediting agency has its own system of sanctions with terms, definitions, and timelines that vary, which means that two institutions with the same types of problems might be treated very differently depending on their accrediting agency.24
To understand the actions taken against CEHE colleges, it is necessary to first understand the actions outlined in ACCSC’s Standards of Accreditation.25 The commission has the ability to withdraw a college’s accreditation if that college fails to demonstrate compliance with one or more standards for any reason ACCSC deems sufficient. However, the standards include a long list of other available actions that range in severity and that the commission may, but is not required to, take before moving to revoke accreditation.
The lowest level of action the commission can take is to defer a decision to another time, which is a way of saying that a college has yet to earn approval on a given issue. Deferring action is not an indication of noncompliance, but rather is used when the commission needs more information in order to make a decision. The commission may make a decision to accredit an institution with stipulations if there is evidence of deficiencies, but these deficiencies are generally issues that can be fixed within a short period of time.
The next level of actions is designed to monitor an institution and review information when there may be noncompliance. The commission can subject a college to heightened monitoring, which provides the ability for a more detailed review of information. It can also place a college on reporting to monitor compliance, which can include requiring that the college provide more information about outcomes, finances, or instances such as litigation reporting when it is facing a lawsuit.
ACCSC actions by severity
There are several actions that ACCSC may take when it suspects a college might not be meeting standards. The accreditor used each of the following actions multiple times against campuses operated by CEHE:
- Deferral of action: The commission needs more information to make a decision; this does not indicate noncompliance.
- Stipulations: There is evidence of deficiencies, but they may be corrected in a short period of time.
- Heightened monitoring: A detailed review of information is required on areas of concern; the school may or may not be in compliance.
- Reporting: Reporting is required on areas of concern, which could apply to finances, student achievement, or other issues; the school may or may not be in compliance.
- Warning: There is reason to believe the school is not in compliance with one or more standards; it must demonstrate corrective action and compliance with standards.
- Probation: There is significant concern about the college’s compliance with one or more standards or it has been determined that the college is out of compliance. As part of probation, the accreditor could direct the college to show cause as to why its accreditation should not be withdrawn. Probation requires the college to demonstrate compliance with accrediting standards.26
One common scenario for which ACCSC uses reporting or monitoring is when a program falls below benchmark rates, a measure of the bare minimum level of acceptable student outcomes required by the commission on graduation, employment, or licensure pass rates. Failure to meet benchmark rates for a prolonged period of time may result in additional action at the program or institutional level, though the commission may also allow a college to demonstrate compliance through other supporting documentation or indicators. For example, a college may argue that poor economic conditions drove down employment rates. However, there is no hard-and-fast timeline for which institutions must demonstrate compliance with benchmarks—and reporting can go on over a long period of time, as was the case with CEHE. Some of the actions that ACCSC used to address the deficiencies included limiting enrollment in underperforming programs and revoking approval of a program to operate.
The most serious set of actions is available when the commission believes that the institution is out of compliance with standards. The first of these actions is a warning. Under a warning, the college is required to demonstrate a corrective action and compliance; it may also be required to inform students about the warning. The second action is probation, which is used when there are significant concerns regarding compliance with one or more standards. The commission has discretion to issue a probation without first issuing a warning. In more severe instances, the commission may also request that the college provide “show cause,” evidence that explains why the college’s accreditation should not be withdrawn. A warning or probation action may require additional reporting and an on-site visit of accreditor staff or reviewers to the campus.
Failure to demonstrate compliance by the end of the warning can result in loss of accreditation or another action, such as monitoring or probation. Failure to demonstrate compliance after a probation period results in loss of accreditation. Under a probation action, the college must inform current and prospective students.
Timeline of actions against CEHE
The timeline below covers actions taken by ACCSC, details some of the reasons why the measures were taken, and includes actions taken by other regulatory bodies.
The timeline is broken up into three parts. The first part covers actions from 2008 to 2012, when ACCSC issued actions indicating lower levels of concern. During this period, the colleges did not yet operate under the CEHE umbrella.
The second part covers actions from 2013 to 2017, when the colleges operated under the CEHE umbrella. These actions indicated that the problems identified during the earlier phase were much more widespread and severe than initially implied. This period also included numerous anonymous complaints and multiple actions from other regulators suggesting outright fraudulent activity.
The final period covers actions from 2018 to the present. During this period, ACCSC made clear that problems were severe and ongoing, existing across the system of schools operated by CEHE. While many of the early actions center on CollegeAmerica Denver, ACCSC has noted on numerous occasions—including in 2012, 2013, 2015, and 2018—that the problems were systemic across CEHE’s campuses.
From 2008 to 2012, ACCSC took a series of escalating actions that started out with concerns over low graduation and employment outcomes in various programs at CollegeAmerica’s Denver (CA Denver) campus.27 CA Denver was the main campus for three branch locations: in Fort Collins and Colorado Springs, Colorado, and in Cheyenne, Wyoming. Under ACCSC standards, the accreditation of branch campuses is dependent on the accreditation of the main campus, which means that an action against the main campus applies to all locations. While the timeline refers to actions against the main campus, these actions typically included multiple campuses.28 In fact, ACCSC noted low outcomes with programs at all locations.
By 2012, after deferring accreditation, requiring outcomes reporting, and issuing a heightened monitoring for one location, ACCSC decided to cap enrollment in all CA Denver programs until the college could demonstrate acceptable levels of student achievement, noting at the time that the problems were systemic and ongoing.29 The agency also reviewed the CollegeAmerica chain for other concerns, including complaints received against the college and an action by a state agency considering whether to revoke authority to operate in the state of Colorado.30 As a result, it deferred a decision to renew accreditation.