NY AG Goes After College Accrediting Agency over For-Profit Schools that Cheated Students

NEW YORK—Attorney General Eric T. Schneiderman joined five other attorneys general Friday in filing a motion to intervene in a federal case against the Accrediting Council for Independent Colleges and Schools.

He's supporting the U.S. Department of Education against the accrediting agency because he says ACICS didn't take steps against companies like CCE, operator of Sanford-Brown Institute in White Plains. CCE settled with New York in 2013 for $10.25 million based on findings that the school fabricated job placement rates for graduates.

ACICS sued the federal education department because officials decided in December to end ACICS’s recognition as an accreditor.

Now to protect their own consumers the states are weighing in on the case in federal district court. Residents rely on federally-recognized accreditors to ensure that colleges offer quality education and protect against abusive practices, Schneiderman said in the announcement.

For-profit schools, which offer associates degrees and skill-based certificates, are predominantly used by people who cannot afford the tuitions at non-profits and who are looking for courses of study directly linked to jobs, according to Forbes, which cited research released by the National Center for Education Statistics that just 12 percent of students enrolled in certificate programs would have had access to a similar program at a non-profit institution where they lived. Forbes said 95 percent of for-profit school students take out federal loans to pay tuition. That makes them a target for unscrupulous operators seeking a steady revenue stream.

Scheiderman said federal education officials conducted an extensive administrative process and ultimately concluded that ACICS failed to meet the requirements for federal recognition as an accrediting agency.

ACICS has a long track record of failures of oversight, he said: ACICS failed to identify misconduct by a number of schools and failed to take action once the misconduct came to light through investigations by state or federal agencies.

In fact, New York and other state Attorneys General have investigated and brought lawsuits against a number of schools that were accredited by ACICS.

For example, Schneiderman said, ACICS accredited Corinthian Colleges, a school that was forced to close or sell all of its schools after investigations by more than 20 state and federal law enforcement agencies and lawsuits by multiple federal and state agencies.

Schneiderman said ACICS accredited certain Career Education Corporation schools, which settled with the OAG for $10.25 million in 2013 based on findings that the company fabricated placement rates. CEC showed annual placement rates for its New York campuses ranging from 54.9 percent to 80.2 percent, when the correct placement rates ranged from 24.1 percent to 64.1 percent, in order to lure students into its program, the AG said. For example, certain CEC Career Service employees improperly counted graduates of Criminal Justice programs who were employed in retail sales positions as having obtained “in field” placements.

CCE operated Sanford-Brown Institute campuses in White Plains, Garden City, Melville and New York City; and Briarcliffe campuses in Bethpage, Patchogue, and New York City. CEC also operates several on-line schools, including American InterContinental University and Colorado Technical University. Sanford-Brown closed in Westchester after the settlement with the AG.

Schneiderman said ACICS also failed to identify problems at Education Management Company, which settled with 39 State Attorneys General, including the OAG, in 2015 to resolve allegations that the school misled prospective students on program costs, graduate rates, and placement rates.

As part of those settlements, EDMC agreed to forgive more than $102.8 million in outstanding loan debt held by more than 80,000 former students nationwide, including 1,828 former New York students who received $2,328,185 in loan forgiveness. EDMC, based in Pittsburgh, operates 110 schools in 32 states and Canada through four education systems: Argosy University, The Art Institutes, Brown Mackie College and South University. Its New York campus is The Art Institute of New York City.

The most prominent for profit that Schneiderman has gone after in recent years is Trump University.

ALSO SEE:

• Sanford-Brown to Close White Plains Campus
• Trump University: No 'Trump,' No 'University,' Lawsuit Says
• Students of Defunct For-Profit School to See $30 Million
• Donald Trump Settles Trump University Case For $25M