Florida Metropolitan University "Settles" With AG over Transfer of Credit "Allegations"

Florida Metropolitan University, has morphed into Everett University and "settled" the Florida AG's inquiry into their transfer of credit wrongdoing. The settlement is humorously redundant and rather hilarious as they basically are going to agree to do what they were already doing, which was "assisting" their students in transferring credits which they knew were not transferable and are still not transferable. This is tantamount to Kevin Trudeau settling an action with the FTC by assisting persons who bought a phony cancer cure, with having the cancer cure work. Coral calcium doesn't cure cancer and the credits that FMU assured its students would transfer to regionally accredited schools are not going to suddenly be transferable simply because most FMU is going to "assist" the students in transferring them. If the portion of the settlement wherein the FMU/Everett will be forced to "better disclose" the fact that the credits do not transfer or i.e., stop lying about them transferring, then it will be beneficial.

Nationally accredited schools complain about the fact that regionals will not take their credits. Whether or not this rejection is fair or not is not the issue, they know that their is a transfer of credit problem, yet do not disclose it to their prospective students and then point to the plight of the students who predictably cannot transfer the credits. So they use the students as unwilling food solders and designated victims in their fight with the regionals. This is illustrated very well by this statement in the article:

"FMU representatives have long maintained that the school has been up-front with prospective students. They also say the problem lies with the transfer schools, for wrongly rejecting credible FMU credits."

The absurd contradictions in that statement would torch any brain cell trying to deal with it. So don't try, you will only hurt yourself. If FMU had been upfront with the students about known credit transfer issues, why would those students be surprised that their credits would not transfer? FMU is like a car dealership that sells you a car that they warrant is perfect when you know it isn't and then getting angry at the unaffiliated service station that will not fix it for free. What's worse still, the cars can never be fixed!

Alen Janisch aka CRI, Retreats to Personal Bankruptcy

For those of you who are not familiar with Court Reporting Institute, Inc. aka CRI, then I suggest the CRI saga website. CRI was basically Alen Janisch adorned with the vestiges and protections afforded by corporate form. Mr. Janisch operated under the guise of CRI, which masqueraded as a educational institution when in reality it was a vehicle for defrauding students, in essence a Venus fly trap, as detailed in the numerous complaints which were sent to the Workforce Training and Education Coordinating Board, a veritable roach motel where only 6% of the students escaped aka graduated and only 1% of those were actually working in the court reporting field.

After 18 years, the Washington State Workforce Board refused to renew CRI/Janisch's license to teach court reporting, then CRI/Janisch was the subject of a distinctly unfavorable article in the Seattle Times and students left in droves. Janisch/CRI closed its "stores" and then when it became clear that its pursuers would not stop...well, pursuing, CRI declared bankruptcy. At the first bankruptcy hearing Janisch declared that CRI had no assets. Hmmm, it turned out that Janisch had withdrawn almost a million dollars out of "CRI" immediately prior to its "fiscal" demise as he admitted in his deposition. The Bankruptcy Trustee promptly filed a lawsuit against Mr. Janisch himself and then moved for summary judgment, to force him to return the money and now, possibly to evade that obligation, he has declared "personal" bankruptcy. Actually CRI/Janisch owes a lot of money.

In his personal bankruptcy filing Janisch states he has around $10,000 in assets and around $10 million in liabilities. Actually, these are debts that CRI incurred. Mr. Janisch's 2837 listed creditors, parallel, surprise, CRI's and include approximately 2800 students who attended his ... enterprise. Ironic when you are seeking to discharge obligations students might have AGAINST YOU. One would think that you SHOULD OWE the students. Guess he listed all those students since 13 of them are suing him and the bankruptcy automatic stay will stop that civil action. Perhaps he was expecting, and rightfully so, those other 2782 to sue him as well. After all, he still owes them money or an education. He took the former and never gave the latter.

For-Profit Education is Just Like Any Other Business?

There has been some controversy over University of Irvine at California and Capella University's agreement that Capella will pay UCI $500 for each student that transfers to Capella University...a marketing fee, consulting fee, cost reimbursement fee, fee split, bounty, kickback, depending on what how you feel about such arrangements. UCI is a public, non-profit institution and Capella is a for-profit private university.

I got into a vigorous discussion/debate with another "blogger" as to how this situation should be treated in an online encyclopedia. That person felt that because the US Department of Education's declared that such an agreement was legal, it was therefore ethical, as if its legality precluded any inquiry into its morality. I pointed out, that credit card companies can legally charge 20% interest rates to their customers, and banks can legally charge $35.00 for overdrafts, and mortgage companies can legally offer home financing with ARMs loans which contain time bomb rates which ultimately explode on the unsuspecting users. The legality of these practices have not precluded or eclipsed discussions on their morality.

When I pointed out, that, as the article cited, there are those who view such an arrangement as making the student a commodity, an object to be traded upon and profited from. This person cheerfully replied that if the agreement treated students as a commodity that was what they are. Students were recruited to attend certain schools, both non-profit and profit, to pay tuition and spend money. Thus they were a "source of production and income." Well, I do not agree with such a statement and see it as one of the biggest problems with for-profit education. They see students as merely commodities and nothing else.

I feel such practices as a school paying another school to refer it students as a conflict of interest and is not ethical. I do not see students as commodities but as consumers of a very valuable and special service, to wit, education. Education is not your ordinary consumable product, like a car, or a sofa. My opinion is that access to education is on a par with access to medical care and legal services. There is a duty that is owed to a patient by a doctor and duty that is owed to client by a lawyer and a duty that is owed to a student by an adviser or school. I feel that they are morally equivalent. Of course money enters into the equation and there are conflicts of interest in the law and medical fields but it is frowned upon and when they are discovered they are news and controversial unlike what might happen in any other "business" where there is no particular duty owed to the "consumer". Education, like health care and legal services is a quality of life issue. It is the key to economic advancement which contributes much to the prosperity of society. When students are treated as "marks" or commodities or persons to profit from, I don't believe that's ethical. Offering kickbacks, marketing fees, referrals or whatever you want call them, has a great potential to obscure the true role of advisers which is to advise the student for the student's sake, not for how much money or profit can be made from them. The practice raises the distinct possibility that students are getting advice which is more dependent on how much money can be gained from them rather that what is truly in their best interest.

My "antagonist" was not completely deterred and stated that paying a school is merely a marketing fee and is a good business practice. Now if Capella was running some other kind of business, maybe it paying another school to refer students to it, would not be controversial, however, they are running a school which is funded by money from the federal government aka the tax payers, so they are going to suffer more scrutiny than a car lot dealership and rightly so. A good business practice for Mercedes Benz is not not necessarily a good business practice for a school!

And that's the problem, many of these for-profit schools are just businesses spewing out diplomas, certificates and degrees like so many cars and interested only in profit with no regard for the desires of the customer. Moreover, they are profiting not only at the expense of the student but at the expense of society and the federal government which underwrites their forays into designer education.

So I Called Herzing Myself

So, I called Herzing College as it was suggested "I" do. I had never called a for-profit school before and it was a very interesting experience. Not unlike calling a car lot or a health club, but more on that later. The deal that the person I spoke to you told me, after checking with the project manager, was that this school has "made a deal with Crown" (aka John Wabel) to accept all of Crown's students; credits. He also pointed out that I would "have a hard time" finding any school to accept Crown's credits, a fact that I was already well aware of. The deal is, as I was told, was that the discount -- wherein Herzing would lower its tuition to that of Crown's and provide free textbooks and software, was only available if the student started this "fall" semester.

Herzing College is not the first for-profit school to accept Crown's credits. University of Phoenix has accepted them for some time. However, many students were induced to go to Crown by misrepresentations made by Crown College admission representatives that there credits would transfer to schools such as public University of Washington and other schools which cost considerably less than Herzing or University of Phoenix. So the fact that Herzing will take their credits, though fortuitous, does not undue the fraud that visited upon them.

Herzing College Responds

An anonymous post was posted in response to a blog article presumably from somebody at Herzing College and I wanted to respond to it. The author of the newspaper article referred to in the "anonymous" post did not ascribe any malicious intent to Herzing, as far as I read. She did report that a current Crown student who presumably contacted Herzing was concerned that all her credits would not be accepted, and more importantly that the school would cost more money than Crown College. As I understand it, the reporter did attempt to contact the school and did not receive a response. The publisher of the blog article also attempted to contact the school and was unsuccessful. The publisher of the blog article did speak with a person who had contacted Herzing College and the person that person spoke to was reluctant to talk to her about specifics concerning Herzing's accepting Crown students.

It is therefore possible that Herzing College initially did decide to accept all credits for which a "C" or better had been earned, reduce the amount of tuition it was charging and offer complimentary software and books to the students who are currently enrolled in Crown and this "offer" was not prompted by the publishing of the second Tacoma News Tribune article and, consequently Herzing never "changed" its position. It is just that nobody was able to ascertain Herzing's position though valid attempts were made to do so.

The author of the blog article, well me, did suspect that Herzing College "changed,", "clarified," "redefined," its position because of the second article. I also suspected, and still do, that their decision to accept Crown College students is not totally altruistic and that their motivations partly revolve around generating name recognition for the school and an influx of revenue, aka students. That in and of itself is not necessarily nefarious and there may be few purely altruistic decisions any commercial enterprise makes. I believe that Herzing's decision to accept all the credits of Crown's College's students' and offer them such favorable terms is puzzling in light of the checkered history of Crown College. I do not believe that this "opportunity" is being extended to non-current Crown College students who have already graduated or quit. Thus, this offer could be a loss leader and they hope to entice former Crown College students to attend there school on terms more profitable to them. Those students will still not be made "whole" as many had hopes of continuing their education at non-profit public universities which cost a good deal less than the likes of the few known schools willing to accept Crown College credits for transfer, including Herzing College.

This blog is about for profit education and what I personally feel is the inherent conflict of interest in any institution that is resolved to provide an education AND make a profit doing it. Many for profit schools, including many of the bigger "players" have been routinely accused of, sued for, and/or settled allegations accusing them of misrepresenting their accreditation, placement rates, facilities, licenses, faculty, transferability of their credits in order to induce prospective students to enroll and stay enrolled so they are able to profit from the revenue derived from them.

However, I have not been able to locate any such allegation, complaint or lawsuit about Herzing College. They are also one of the few for-profit education schools who have are regionally accredited so, they will theoretically not suffer from the "transfer of credit" blues. If they are a purely a white knight, the are to be commended.

Herzing Will Now Accept All Crown College Credits From Current Students

In an earlier Tacoma News Tribune Article, a student stranded by Crown College's loss of accreditation lamented that, despite John Wabel's assurances, Herzing College would only take a portion of her credits and that it cost more than Crown College. Thus, she would have to attend Herzing College for two more years before she received her Bachelor's degree and borrow more money.

It appears, that in response to that article, Herzing has "reversed" course and now, as reported in a follow-up Tacoma News Tribune story, Herzing states that it will accept all the credits of Crown College students currently stranded by Crown College's closure as long as they are earned a "C" or better which is standard practice for transfer. Also, Herzing will charge them reduced tuition and give them complimentary software and books.

Hmmmm, it would appear that Herzing changed (or clarified) its position not out of some kind of everyman, altruistic concern for the academically shipwrecked students but out of perhaps embarrassment at the previous story which appeared to contradict the first reports that they would take all the credits. They are after all a for-profit institution so unfortunately, their motives are suspect. This is an opportunity for them get an influx of students and some name recognition. It also displays the power of the media. Had the Tacoma News Tribune not published the story of the Crown College student whose credits were not going all be accepted and the higher tuition, would Herzing College have changed their position? Somehow I do not think so.

However, the end result will be that the last batch of Crown College students will be the most fortunate inasmuch as they will end up with a credits and degrees from a regionally accredited institution making them truly transferable to most institutions. Something none of the previous 17 years of Crown College students had despite the fact that many admission representatives told them that. Ironic, that they are saved by Crown College's demise! Truly ironic.

Crown College Key Employees Investigated for Financial Aid Fraud

As the Seattle Times and Tacoma News Tribune have reported, federal investigators suspect several Crown College employees of financial aid fraud, conspiracy to defraud and bank fraud. The Department of Education, Office of Inspector General served a search warrant on Crown College and seized records, a lot of records as the returned search warrant details. Apparently, some clever Crown employees, when they suspected that Crown College was going to close, applied for federal loans and grants though they were not and had no intention of attending classes. They figured that once Crown closed the loans would be discharged under Department of Education rules governing school closures and they would retain the funds thus unjustifiably enriching themselves. Unfortunately, Crown did not close when they thought it would, so they dummied up documents giving the appearance that they were attending the school.

Well considering how these employees excel in contriving documents and lying to prospective students, (Read the Declaration of Adrienne Rocco, a former admissions representative and her complaint to the ACCSCT) this was easy enough for them to do. Especially since many of them lack a moral compass, traits that made them quite valuable to school whose profits were premised on lies. There are a few honest employees at the school, as misplaced as they are, and one of them reported the fraud to the HECB which reported it to the Department of Education.

Mr. Wabel informed the Seattle Times that he was unaware of the investigation and declared that the perpetrators were innocent. It seems that Mr. Wabel, as is his habit, was looking the other way, or perhaps behind his back (as he is in the above picture of a Crown College employee get together). However, the affidavit filed in support of the search warrant strongly implies that Mr. Wabel was indeed aware of the investigation, notwithstanding his statement to the contrary. Moreover, the affidavit cites a kaleidoscope of evidence pointing to the potential culpability of all the Crown College administrators named in the search warrant which include Sheila Mullineaux, the director of the school, Jesy McMullin, the senior admissions representative (who allegedly lied about the transferability of Crown credits to several former Crown students), Misty Lee, the financial director and Jennifer Byers, the business manager.

Mr. Wabel is quoted as saying that the employees listed in the warrant "are good at what they do." Would that be lying and stealing? The fact that some of the most trusted, and senior administrators at Crown might endeavor to defraud the federal government simply because they felt that they could get away with it, shows you how casually they could defraud the very students who depended on them for guidance and truth. It might well be why they rose so high in the organization. Mr. Wabel has to be proud of his employee selection process!