On February 29, 2012, The Washington Post Company released its 2011 10-K annual report. The report detailed accreditation problems at Kaplan College medical training programs all across the country. The annual report also revealed a dramatic decline in Kaplan's fortunes. Revenues at Kaplan Higher Education declined $500 million in 2011. Kaplan Inc.'s operating income declined from $347 million in 2010 to $89 million in 2011, and total enrollment declined from 97,000 to 75,000.
The fact that Kaplan Higher Education is failing to meet basic accreditation standards related to the training of medical personnel is a public health and safety concern. For example, at Kaplan's radiology program, it has been alleged that Kaplan failed to have a published pregnancy policy consistent with state and federal laws and make this policy known to female students.
Read More: The Public Intellectual Project
The WaPo annual report established a disturbing pattern of accreditation problems which is not compatible with a legitimate academic institution. Kaplan and other for-profit colleges want to have access to federal education money, but time after time, their actions demonstrate that they are unwilling to behave like real academic institutions. Kaplan's answer to regulatory problems is to pay off politicians to weaken or rescind troublesome rules and regulations, thus reducing oversight, disclosure and transparency.
The Washington Post Company reported the following accreditation matters in the 2011 annual report to the Securities and Exchange Commission (SEC):
1) On January 26, 2012, Kaplan University received a notice from the Florida Board of Nursing regarding the Associate's degree in nursing program at the Pembroke Pines facility. The letter required Kaplan University to appear at a hearing on February 1, 2012, to discuss the performance of program graduates on the national nursing certifying exam (NCLEX), which has fallen below the required standard. As a result of the hearing, the program was placed on probationary status until the exam pass-rate improves. Under the Florida Board of Nursing Rules, a failure to achieve the required NCLEX passage standard in either of the next two calendar years could result in the program losing its license to operate in Florida.
On Feb 28, 2012, following the Florida Board of Nursing hearing, Kaplan announced it would be closing the Pembroke Pines school. This was the campus which was caught engaging in deceptive recruiting practices in an undercover federal sting in 2010 and the same institution that was being investigated by the Florida District Attorney. Enrollment has dwindled to 53 students.
2) On December 21, 2011, Kaplan College's North Hollywood, CA campus received notification that the Joint Review Committee on Education in Radiologic Technology (JRCERT) withdrew the college's accreditation for its radiologic technologist program. This program had 163 students on December 31, 2011. Kaplan College has appealed this decision and accreditation for the school will be maintained during the pendency of the appeal. Loss of JRCERT accreditation for this program may have a material impact on Kaplan College's North Hollywood campus and would certainly affect Kaplan's bottom line.
Kaplan was only one of five radiology programs nationwide to ever have their certification involuntarily withdrawn in 2011. Yet despite being unable to meet basic accreditation standards, Kaplan has been charging $42,000 for their two-year radiology certificate, while nearby Los Angeles City College charges $2,000 for a two-year radiology associate's degree.
3) In November 2011, an internal investigation determined that certain students in the Dental Assistant program at Kaplan College's Charlotte, NC, campus had not received clear guidance regarding the program's accreditation and the employment prospects for graduates of the program. Because the Dental Assistant program is not programmatically accredited, students graduating from the program are considered by the regulatory agency in North Carolina to have "Dental Assistant I" status instead of a more advanced "Dental Assistant II" status. All students in the Charlotte Dental Assistant program were given full tuition refunds, and current students and graduates were offered stipends in exchange for signing settlement agreements. As of December 31, 2011, the vast majority of the affected students have signed settlement agreements. [These Kaplan-generated agreements have nondisclosure clauses that prevent the public from seeing the violations by Kaplan and the terms of the settlement agreement. We do know that the cost of settlement was $5 million.] The school ceased enrollment in the program and withdrew its license to operate the program in North Carolina. No other programs at this campus were affected .
Kaplan was exposed by a local TV station for misleading students, for months, about accreditation status. The reporter even uncovered that Kaplan had never even applied for accreditation, despite being eligible to do so. Within days of the story's broadcast, Kaplan offered students a settlement and volunteered to surrender its license to operate the dental assisting program in North Carolina.
4) In August 2011, Kaplan College's Modesto, CA, campus was ordered by the Accrediting Bureau of Health Education Schools (ABHES) to 'show cause' why continued accreditation of its Medical Assisting program should not be denied due to low placement rates. Kaplan College Modesto responded, and ABHES agreed to continue the current grant of accreditation through December 31, 2012, to allow the campus additional time to continue to show compliance with ABHES standards. Loss of ABHES accreditation for this program would have a material impact on the Modesto campus and Kaplan's bottom line.
Medical assisting program problems are not limited to Kaplan's Modesto campus. On December 18, 2011, Kaplan student Michelle Flanagan, from Chicago, posted the following message on Kaplan University's Facebook page:
"I attend Kaplan University as well. My major is medical assisting. The school is having a hard time finding me a clinical site. Therefore, I will have to take next semester off until I am placed at a site.
5) On or about January 17, 2008, an Assistant U.S. Attorney in the Civil Division of the U.S. Attorney's Office for the Eastern District of Pennsylvania contacted KHE's CHI-Broomall campus and made inquiries about the Surgical Technology program, including the program's eligibility for Title IV U.S. Federal financial aid, the program's student loan defaults, licensing and accreditation. Kaplan responded to the information requests and fully cooperated with the inquiry. The DOE also conducted a Program Review at the CHI-Broomall campus, and Kaplan likewise cooperated with the Program Review. On July 22, 2011, the U.S. Attorney's Office for the Eastern District of Pennsylvania announced that it had entered into a comprehensive settlement agreement with Kaplan that resolved the U.S. Attorney's inquiry, provided for the conclusion of the DoJ's program review and also settled a previously sealed U.S. Federal False Claims Act (False Claims Act) complaint (31 U.S.C. § 3729, et seq.) that had been filed by a former employee of the CHI-Broomall campus. [Once again, it must be noted that the terms of the settlement did not disclose Kaplan's abuses or the agreement's terms.]
In the CHI matter, Kaplan had been enrolling students in the surgical technology program knowing that there were not enough clinical externships available for students to complete the program and graduate. It took the Washington Post Company four years to agree to a $1.6 million settlement to pay back the affected students' loans, and the money the company paid back was money it received from the federal government to provide students with college educations. In essence, Kaplan pays the cost of settlement out of Title IV funds and student loans. In 2011, Kaplan renamed the CHI school in an attempt to erase the stain from this case.
In addition to the aforementioned accreditation problems, the 2011 annual report disclosed that Kaplan has been subject to the following legal proceedings: two class-action lawsuits, five false-claims whistleblower lawsuits, an employment discrimination lawsuit by the Equal Employment Opportunity Commission (EEOC), a Senate inquiry, and subpoenas and investigative demands from the attorneys general of Illinois, Massachusetts, Delaware and Florida.
All of this litigation, coupled with the company's continued lobbying, settlements and activities designed to assure that Kaplan profits from education, has cost taxpayers and students hundreds of millions of dollars. It is time that the public begin asking if this for-profit college/university experiment should stop.
Washington Post Newspaper: EduGate
None of the accreditation problems or legal proceedings facing Kaplan has been reported in The Washington Post. Apparently, The Washington Post Company has been too busy engaging in misconduct to report on it. This seems to be further evidence of how The Washington Post has sold its integrity in exchange for quarterly profits which have now evaporated, leaving the Post left with little more than a soiled reputation and shuttered news rooms.
The Washington Post Company's diversified portfolio of legal problems detailed in their 2011 annual report is astonishing, and should force the public to sit up and take notice. Furthermore, by failing to report on the extensive legal troubles at Kaplan, The Washington Post has also ceased being a real newspaper, preferring to conceal more than it reveals.
In 2010, Washington Post Company Chairman Donald Graham told The Wall Street Journal, which was reporting on proposed regulations of the for-profit college and university industry: "They aimed at the bad actors and they wound up scoring a direct hit on schools that service low-income students ... That cannot be what the Obama Administration wants."
If 16 whistleblower lawsuits, a Department of Justice investigation, a Government Accountability Office (GAO) sting, an EEOC lawsuit, over a dozen investigations by state attorneys general, payouts of over a quarter-billion dollars to executives and raising tuition on poor students to dishonestly maintain access to federal funds does not constitute a "bad actor," then, in Graham's eyes, what does?
Kaplan University was once known as the cash cow of The Washington Post company. Now, it is little more than a legal albatross for its sugar daddy. Tragically, the Post Company's answer to Kaplan's declining domestic fortunes has been to export their educational product internationally. Kaplan International was one of the only divisions of the Washington Post Company to show growth in 2011, with a $100 million increase in revenues. This tells us that our struggle against Kaplan and the for-profit college industry is now international.