Scrutiny lax on national colleges, critics say
Sacramento Bee 2/20/07
As one of the largest private for-profit schools with 200,000 students nationwide, the University of Phoenix successfully lobbied the Department of Consumer Affairs's Bureau for Private Postsecondary and Vocational Education to let it stop releasing licensing information, such as course completion and job placement rates, arguing its programs were not vocational.
Today University of Phoenix, along with DeVry University, Corinthian Colleges and some of the largest out-of-state degree-granting institutions, don't file annual performance reports even though California law appears to require all schools doing business in the state to release such information. The bureau did not reverse its decision even after a court ruling found the law was being misapplied.
Consumer advocates, attorneys and education consultants said the bureau's interpretation is flawed and undermines the state's mission to protect an estimated 400,000 California students from potentially unscrupulous "diploma mills" -- for-profit schools with high tuition that overpromise students on their earning potential.
They see the situation as an example of the board's dysfunction as it approaches possible extinction on July 1.
If lawmakers and Gov. Arnold Schwarzenegger don't approve legislation by July 1 to extend its life, the regulatory body will cease to exist. While the governor has promised to propose an overhaul plan, consumer advocates want to preserve student protections.
"The bureau is a worthless regulatory agency because they do the bidding of the schools and hardly any enforcement of the law," said Elena Ackel, a senior attorney with the Legal Aid Foundation.
The regulated schools also are unhappy with the bureau and would like to see a streamlined licensing process.
Bureau administrators contend they are doing their best to navigate complex and contradictory regulations with an inadequate staff, said the bureau's director, Barbara Ward.
For example, Ward said the bureau, which is funded through school licensing fees, hasn't been able to increase fees in more than a decade because the law requires a two-thirds vote from a council that no longer exists.
"We have to do a cold reading of the law," she said.
In 2005, attorneys for the University of Phoenix began petitioning state regulators to let the school stop reporting the most basic information about itself, including how many students complete its courses and how many of them successfully find jobs.
The school argued that it should be exempt from filing annual performance reports because its degree programs are "not vocational in nature."
Ward, who worked as an adjunct faculty member in health care and business from 1996 to 2005 at Phoenix, had to recuse herself from making any decisions pertaining to the school. The decision was left to Steven Giorgi, an appointee who served as director of bureau operations at the Department of Consumer Affairs.
Giorgi, now at the California Gambling Control Commission, told the University of Phoenix that it was exempt from all requirements. In a memo dated Sept. 14, 2005, Giorgi wrote: "We now are of the opinion that this documentation will not be necessary."
In trying to weed out redundant regulation, the Legislature in 2003 approved Senate Bill 967 exempting degree-granting schools accredited by regional bodies from program review by the state.
"It's very explicit that even though they don't have to go through the same initial review that non-accredited schools do, they still have to meet other requirements," said Bruce Hamlett, a former Assembly consultant who worked on the issue.
Even if state regulators provided less scrutiny over such schools, the law never exempted them from filing annual performance reports, complying with student protection laws or facing enforcement actions by the bureau, Hamlett said.