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Private, for-profit colleges face increased state oversight

CHARLESTON, W.Va. -- West Virginia's public higher education oversight body will, for the first time, have authority to regulate and shut down struggling private and for-profit colleges in the state if the Legislature approves a new rule change in the coming months.

The rule, which is up for public comment this month, revamps the way the state's Higher Education Policy Commission interacts with private colleges and will usher in an era of increased accountability, said Kathy Butler, vice chancellor for academic affairs at the HEPC.

"[The HEPC] has always had the authority to monitor the public universities, but not the privates," said Butler. "There wasn't any ongoing monitoring and quality assurance for consumers when it came to private schools."

The new policy, which would kick in by November 2013, gives the HEPC power to demand data on student retention rates, transfer information, licensure pass rates and loan default rates from every private college operating in West Virginia. The more than 70 out-of-state colleges from Oregon to Connecticut that offer online programs to West Virginia students also must receive annual HEPC authorization to operate here.

If the HEPC decides the institution isn't meeting performance benchmarks, it can shut down programs and even withdraw an institution's accreditation.

Policymakers say the increased oversight of all colleges will protect consumers from money-hungry diploma mills.

Critics, however, argue that the rule is an invasive power-grab that unfairly regulates private institutions.

"A lot of the reporting is what we do now, so that won't be a big change," said Ed Welch, president of the University of Charleston, a private not-for-profit school based in Charleston. "But if the HEPC decided to launch an investigation, it's going to be very onerous and time consuming and invasive for a private institution to have to share this with a public body. It's regretful that the state feels it's necessary to do this to everyone when they're only concerned about a few bad apples."

 

Broadened accountability

State senators passed a bill in 2011 granting the HEPC broadened regulatory powers as the national dialogue swirled around the lack of oversight of for-profit institutions and fly-by-night colleges.

Erik Wells, D-Kanawha, was one sponsor of the legislation.

"We didn't want for-profit colleges coming into the state and making claims that couldn't be verified," Wells said. "At this point, the commission does have the ability to shut a place down and say they're going to revoke an institution's authority to grant degrees if they're not performing. This bill gave them a lot more strength to stop these practices."

There are 10 regionally accredited private, not-for-profit colleges and universities and four accredited for-profit institutions in West Virginia.

The second aim of the legislation was to hold colleges that specifically target military personnel accountable -- particularly for-profit colleges, Wells said.

Last year, the West Virginia National Guard paid more than $245,000 in tuition assistance to for-profit institutions in the state and more than $240,000 to private institutions. Nearly 125 of the more than 1,300 soldiers and airmen in tuition-assistance programs in West Virginia are enrolled at for-profit institutions and 77 are enrolled at private schools, said Lt. Col. David Lester, spokesman for the West Virginia National Guard.

Butler said the rule change also would grant the HEPC power to deal with colleges facing serious accreditation and retention problems that formerly were off limits to the HEPC.

Mountain State University, a not-for-profit based in Beckley, for instance, has been wracked with accreditation problems for years that now threaten to shutter the school completely.

In 2010, MSU's nursing program lost its national accreditation and, in February, had its state accreditation revoked by the West Virginia nursing board after years of failing to address major deficiencies. MSU is currently fighting to maintain its university-wide accreditation status with the Higher Learning Commission and will hear at the end of the month whether it will be forced to close.

Throughout MSU's accreditation crisis, the HEPC has been powerless to intervene, despite the thousands of state students affected by the school's troubles.

"If we had had this rule in place earlier, with annual reviews, we might have been able to have caught some of the problems at Mountain State and assisted them in whatever the issue was," Butler said. "But we didn't have any authority to intervene and catch things early."

 

WVU and Marshall exempt

Welch said his major concern with the policy change is that private colleges will be subjected to a level of government oversight not directed at the state's two largest public universities -- schools that receive huge amounts of public funds.

"You worry this is a public commission that has oversight of private institutions and hope that privates aren't being disadvantaged," Welch said. "A public body that supports public institutions will be directing and overseeing and authorizing private schools."

West Virginia University and Marshall University are notably exempt from the HEPC's expanded oversight rules because of a key piece of legislation passed in 2005 that gave the two research institutions cushion from HEPC sanctions. That means that, while WVU and Marshall must report things such as graduation and retention rates to the HEPC, the HEPC has no power to revoke programs or deny accreditation from either university, even if the schools are struggling.

"Why in the world are the two largest public institutions in the state the only ones not included in this oversight?" Welch said. "WVU and Marshall don't have to be authorized by the HEPC and they get more public funds than anyone else."

WVU received more than $141 million in state appropriations this fiscal year. Marshall received more than $66 million.

Mike Callen, the president and CEO of West Virginia Junior College, a for-profit institution, said he applauds the HEPC's move to give students more information on college performance, but said the increased reporting requirements won't change the way he does business.

"Most of what's in the bill is already required by a different set of regulations, so this change doesn't add a whole lot for us," said Callen. "But it's particularly important for public institutions like WVU and Marshall to report these things because they receive hundreds of millions in taxpayer dollars, so it's particularly important that we have a discussion to look at performance."

Under the rule change, colleges with a "physical presence" in West Virginia -- there are at least 14 -- must pay a $500 annual reauthorization fee. (Public colleges are exempt from this fee.)

Butler said the more than $7,000 generated each year by the policy will pay for uploading all the information that colleges provide onto the HEPC website. Depending on the amount of data crunching, she said, the HEPC might have to add an administrative position.

Callen agrees that there needs to be more education oversight, but questions a culture that is tied solely to performance indicators such as student retention rates.

"I do firmly believe that what you get out of education is based on what you put into it," he said. "So, simply looking at performance one year doesn't necessarily reflect the quality of education -- but it's an important discussion to have."

Reach Amy Julia Harris at amy.harris@wvgazette.com or 304-348-4814.


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