Accreditor's Lies Killed College

[Don Dresden]

They're from the quasi-governmental administrative agency and they're here to help you....

Oh, that's just the COE, they're a minor national trade-school type accreditor. Nobody at a gold-standard regional accreditor would ever do such a thing just to screw a for-profit for political reasons...would they?

'False' Statements About a For-Profit
July 13, 2012 - 3:00am

By
Doug Lederman

The 2005 bankruptcy of Decker College drew more than its share of national headlines, not least because one of its investors (and, for a time, its president) was William Weld, the former governor of Massachusetts and, at the time, a candidate for governor of New York.

The closure of the for-profit college in Kentucky was precipitated by the U.S. Education Department's September 2005 decision to terminate Decker's eligibility for federal student financial aid. The federal agency made its decision in large part based on statements by the college's accreditor, the Council on Occupational Education, that Decker had delivered three of its programs online without the agency's approval.

On Tuesday, a federal bankruptcy judge in Kentucky ruled that the accrediting agency's representations to the Education Department were false -- saying that Decker officials had made clear to the council on numerous occasions that the college was using distance education to offer the programs, and that the agency had approved the programs nonetheless.

While the judge's ruling comes far too late to resuscitate Decker, it could have major implications for two court proceedings over the college's assets. It could also prove costly for the Council on Occupational Education, as lawyers for the college's estate could sue the agency over actions that they say led to the institution's demise.

"This misrepresentation is absolutely what destroyed Decker," said Peter Coffman, a lawyer with Dow Lohnes who is representing Decker's bankruptcy trustee.

Decker was not entirely trouble-free in 2005, its lawyers admit; the Education Department was auditing the for-profit college, and state and federal officials were examining various sorts of possible wrongdoing, too. But those things "would have been handled," Coffman said, were it not for a series of interactions that summer between the occupational accreditor and the Education Department.

As laid out by Judge Thomas H. Fulton, of the U.S. Bankruptcy Court for the Western District of Kentucky, a U.S. Education Department official, Ralph LoBosco, asked leaders of the Council on Occupational Education in June 2005 if they knew that Decker was operating associate degree programs in carpentry, electrical and heating/refrigeration work entirely online. In a series of telephone and written communications between the agencies over the next few months, the accreditor stated that its officials "understood that these degrees would be taught primarily using the traditional delivery mode with limited distance education," and that "the programs in question had not been approved to be offered primarily through distance education."

It was based on those and other statements -- which Decker officials tried to challenge at the time -- that, on Sept. 30, 2005, the Education Department made Decker ineligible to participate in federal aid programs, taking away its primary source of revenue. The college entered bankruptcy less than a month later.

But in Judge Fulton's analysis, Decker officials had given the accreditor ample evidence that they planned to use online education to deliver the programs, before the agency approved them. Fulton identifies numerous places in the college's May 2004 applications for approval of the programs where it stated that they would be offered via distance education. Similarly, the judge notes that the college's accreditation self-study in 2004 mentioned the programs' online delivery, and that the agency sent members of its site visit team to tour the college's distance education facilities.

He also recounts a meeting at which Weld, then the institution's president, " 'glowingly' described the nature, structure, and majority online component" of the programs to Representative John Boehner, then the senior Republican on the House education committee, at a May 2005 meeting, with the accrediting agency's president, Gary Puckett, looking on.

"Dr. Puckett sat next to Mr. Boehner at a 'small table' with Mr. Weld but testified that he does not recall such discussion," the judge wrote. "The Court finds Mr. Puckett's lack of recollection somewhat incredible given the detail of Mr. Weld's testimony."

That tone of incredulity marks much of the judge's ruling, which concludes: "For all of these reasons the court [m]ust find that defendant in fact approved delivery of the programs through distance education and that, therefore, the statements were false insofar as they asserted that plaintiff had not been approved to offer the programs through distance education."

The judge offered no explanations for why the agency would have misrepresented Decker's situation, saying that was not within the court's charge. But Decker officials have asserted that Education Department officials were suspicious of the college's growth and that some may have had past differences with Weld.

What Happens Next

Fulton's ruling is likely to have implications for two separate legal proceedings, one before an administrative judge in Washington and the other in bankruptcy court in Kentucky, that have limped along in the years since Decker's bankruptcy. The proceeding in Washington involves the Education Department's attempt to recoup $32 million in funds that Decker disbursed through its online programs; the bankruptcy court is sorting among the creditors' claims (including the federal government's) for the college's remaining assets.

Michael B. Goldstein, another lawyer at Dow Lohnes involved in the case, said that with this week's ruling, the department's claim that Decker should be forced to repay those funds "just went out the window."

Officials at the accrediting agency and at the Education Department did not respond to several messages seeking comment.

[Dickie Billericay]

...the accrediting agency's president, Gary Puckett, looking on.

Did he have cheating on his mind?

[Armando Ramos]

...the accrediting agency's president, Gary Puckett, looking on.

Did he have cheating on his mind?

You do realize that no one under the age of about 55 gets that?

[Don Dresden]

Judge Backs Finding That Accreditor Misled U.S. on For-Profit College
December 7, 2012

A federal district judge on Thursday upheld a bankruptcy court's ruling last summer that an accrediting agency had made false representations to the U.S. Education Department that helped lead to the demise of Decker College, a for-profit college that closed in 2005. The Council on Occupational Education had appealed the bankruptcy court's July 2012 decision to a federal district court in Kentucky, arguing that the bankruptcy judge had erred in concluding that the agency's officials had misled federal officials by reporting that Decker had delivered three of its programs online without the agency's approval. But Judge John G. Heyburn II's 13-page ruling said: "The bankruptcy court reasonably found COE to be dishonest when it told the department it did not approve the hybrid programs to be offered in such a manner."

Check the comments section to see who is putting in his $0.02....it's the Sphincter himself! Two cents just doesn't buy you what it used to. Is the guy on his meds or off?

McGhee (as usual) is absolutely correct, accreditation as it currently exists is a corrupt process lacking transparency and oversight. The existence of one or a thousand paper-shuffling government busywork agencies is not the equivalent of oversight. The Decker College case proves it. If there were actual oversight either Decker still would be in business or the COE would cease to exist.

[Winston Smith]

Latest update on the Decker saga:

$31 Million Court Win for a For-Profit College

Federal judge backs finding that an accreditor misled the Education Department about a now-closed for-profit institution, and relieves most of the college's debt.

March 24, 2016
By Ashley A. Smith

One piece of inaccurate information precipitated Kentucky-based Decker College's closure more than 10 years ago. That misinformation, provided by Decker's accreditor to the U.S. Department of Education, about the status of Decker's distance education program, led the department to terminate the for-profit college's participation in the federal student aid program. The department also determined that Decker owed more than $32 million in federal aid.

But last week, an administrative law judge ruled that officials representing the former college would no longer have to pay more than $31 million back to the department because the information from the Council on Occupational Education was "factually inaccurate."

"The department took, on its face, the statement of the accreditor and acted on that statement with the expectation that an action of an accreditor was true," said Mike Goldstein, a partner and higher education legal expert at Cooley law firm, which is representing Decker. "This wasn't just a letter from the head of an agency. This was a determination made by the COE commission that was not just false, but also resulted in the cataclysmic collapse of an institution and a loss to a great many people."

That letter from the accrediting council to the Office of Federal Student Aid claimed that Decker's building trade and construction trade programs were not accredited to be delivered through distance education.

"With such a very significant amount of liability at issue and such significant results flowing … it is troubling that FSA relied exclusively on this letter as a scant basis for imposing a $31 million liability, and that FSA chose not to conduct any examination of the facts and circumstances behind the letter from COE," the judge said in his decision.

Officials with the occupational education accreditor did not respond to requests for comment. Officials at the Federal Student Aid office declined to provide comment on the case.

"The strangest thing is that COE appears to have given the department incorrect information about what colleges it accredited were actually approved to do," said Ben Miller, senior director for postsecondary education at the Center for American Progress. "Part of this might be because the rules on distance education were changing right around then. But a lot of this craziness appears to be because the accreditation agency could not fulfill a basic requirement of an oversight entity -- know who you approved and for what."

But Decker still owes some money to the department. Some students, for instance, received additional grant money earlier than they should have. The judge, in his decision, advised the department and Decker to reach an agreement based on formulas used during the case.

"The money for students in distance education does not have to be repaid by Decker," Miller said. "By contrast, the money owed for students who dropped out and were not tracked properly is reduced. So overall Decker still looks like it owes something, just not $30 million."

The college did have other problems beyond the accreditor. In 2005, Decker was facing an audit from the department, and state and federal agencies were examining possible wrongdoing.

"There were other issues that in the ordinary course would've been resolved in a program review and Decker would probably still be around," Goldstein said, adding that Decker has sued the accreditor.

Although Decker went out of business, some students and vendors are still owed money, Goldstein said, adding that the institution submitted more than $11 million in reimbursements to the department under heightened cash monitoring.

Goldstein said he's hopeful the department won't appeal the decision and will work with Decker's representatives to resolve the situation.