At a Senate Hearing, Tough Questions for a Fast-Growing For-Profit's Accreditor

March 10, 2011

Accrediting agencies were back in the Congressional hot seat on Thursday, seven months after a hearing in which they were accused of ignoring recruiting abuses at for-profit colleges.

During Thursday's hearing, Senate Democrats grilled the president of a major regional accreditor about its oversight of distance-education programs and raised doubts about accreditors' capacity to evaluate billion-dollar multistate programs.

"I don't think accrediting agencies have the wherewithal to do it," said Sen. Tom Harkin, an Iowa Democrat and the chairman of the Senate education committee. "This is a whole different horse of a whole different color."

Mr. Harkin repeated his threat to impose federal oversight criteria on accreditors. "We may need to tell accreditors, 'You need to do these things,'" he said.

Thursday's hearing had been billed as a "case study" of Ashford University, a for-profit institution that was created in 2005, when Bridgepoint Education Inc. purchased Franciscan University of the Prairies, a struggling religious college in Mr. Harkin's home state, and obtained its accreditation. The institution has experienced phenomenal growth since then, with enrollment swelling from 300 students to 78,000, 99 percent of them online.

Mr. Harkin, who is conducting an investigation into the for-profit sector, has been highly critical of Bridgepoint, accusing the company of profiting off taxpayer dollars while failing to serve students. In his opening statement, he hammered the company over its high dropout rate, low per-student spending, and eye-popping executive compensation, calling the college a "scam, an absolute scam."

Republicans, who have accused Mr. Harkin of conducting a witch hunt against for-profit colleges while overlooking problems in the nonprofit sector, boycotted the hearing. Only one Republican senator—Michael B. Enzi of Wyoming—made an appearance, and he left after making an opening statement. In his remarks, Mr. Enzi accused Mr. Harkin of conducting the "most biased and poorly executed hearings in my nearly 15 years in the Senate."

The Limits of Oversight

Thursday's witness list included individuals representing the three entities charged with overseeing Ashford: the federal government, the State of Iowa, and the institution's accreditors. Bridgepoint's chief executive, Andrew S. Clark, who was paid $20.5-million in 2009, declined to attend. In a news release, the company said it could not speak publicly while the Education Department was weighing its response to a recent audit of Ashford University. 

 The audit, which was published by the department's inspector general in January, found that the college failed to return an estimated $1-million in federal aid awarded to students who later withdrew, and may have violated a federal ban on incentive compensation for college recruiters. Kathleen S. Tighe, the inspector general, summarized those findings at the hearing Wednesday.

The committee also heard from Arlie Willems, a recently retired reviewer for the Iowa Department of Education, about the agency's decision to reject Ashford's bid to offer a master of arts in teaching. She testified that Ashford got around the rejection by forming a partnership with an Arizona college that allowed students to obtain an Arizona teaching license that could then be transported to other states. 

 Earlier in the hearing, Mr. Harkin had voiced concerns about state oversight, arguing that "very few states provide serious scrutiny of for-profit colleges operating within their borders." But he, and the handful of other Democrats who spoke during the question-and-answer period, saved most of their fire for Sylvia Manning, president of the Higher Learning Commission of the North Central Association of Colleges and Schools, Ashford's accreditor.

Democrats questioned the commission's decision to continue the accreditation it awarded to Franciscan University of the Prairies even as the college was transformed into something completely different from its predecessor. They asked why the college's enormous growth and high withdrawal rates didn't trigger a thorough follow-up review.

Ms. Manning readily acknowledged that the commission hadn't been prepared for Ashford's metamorphosis from a small, religious college to a for-profit behemoth, saying her agency was "behind the curve, and had catch-up to do" when it came to distance learning. But she urged the committee to leave decisions about academic quality to accreditors, saying her organization has tightened its standards and taken steps to prevent for-profits from buying institutions solely for their accreditation.

"What happened in 2005 could not happen today," she insisted, noting that the commission has since refused to transfer accreditation to for-profits seeking to buy two other struggling, small colleges. One of those institutions, Dana College, in Nebraska, closed as a result.

Visits With a Lobbyist

Accreditors have been under heightened federal scrutiny since 2006, when Secretary of Education Margaret Spellings's Commission on the Future of Higher Education flirted with the idea of establishing federal standards for assessing student learning.

Faced with the latest federal assault, some accreditors are going on the defensive. Last week, Ms. Manning made the rounds of Democratic committee offices to explain accreditation to lawmakers in advance of the hearing, aides and college lobbyists said. Accompanying her was Tony Podesta, a top Democratic lobbyist whose firm, the Podesta Group, has represented Warburg Pincus, an investment group with a 65 percent stake in Bridgepoint Inc., and lobbies for the Association of Private Sector Colleges and Universities.

Neither Ms. Manning nor Mr. Podesta responded to e-mails from The Chronicle that asked if he was representing the Higher Learning Commission. If he is, it could create "at least the appearance" of collaboration between an accreditor and a company that it oversees, said Barmak Nassirian, a lobbyist for the American Association of Collegiate Registrars and Admissions Officers.

The hearing was Mr. Harkin's fourth on the federal investment in for-profit colleges, and the senator presented it as an "opportunity to bring all of these pieces together."

"This will give us a window into the key elements of the for-profit education business model, and the implications of that model for students and taxpayers," he said.

But the senator's critics say focusing on Bridgepoint, a mostly online institution that has experienced astronomical growth, may offer a distorted picture of the for-profit sector. Though Ashford is hardly the only for-profit institution to obtain accreditation through the purchase of a nonprofit institution, a majority of colleges still seek approval the traditional way, through formal review.

"I would question whether any one company, and particularly Bridgepoint, is emblematic of the sector," said Mark L. Pelesh, a lobbyist for Corinthian Colleges.