Four Shrinking Universities that Major in Foreign Students

By David North on February 13, 2020

For reasons unknown — certainly not because of actions taken by the Department of Homeland Security — four universities that major in foreign students, and provide them with federally subsidized work permits, have shrunk in one way or another in the last couple of years.

These work permits, through the Optional Practical Training program, give employers an 8 percent tax break for hiring new alien college graduates, rather than citizen ones. It is, of course, good news that the volume of OPT permits from these places is declining, but the puzzle remains.

All four of these universities have (or have had) as their accreditor the Accrediting Council for Independent Colleges and Schools (ACICS), the least demanding of the accreditors; all had trouble with regulators and/or accreditors; and all, by one or more measures, are shrinking in size. In three cases, the reduction was expressed in rapidly falling revenues, while in the fourth, Virginia's Stratford University, a for-profit whose finances are hidden, it reduced the number of campuses it operates in the United States.

Sinking Revenues in Three Shrinking
Universities, 2016-2018 (rounded)

University 2016
Northwestern Polytechnic University (Calif.) $72,810,000 $10,714,000 $2,980,000
Virginia International University (Va.) $18,066,000 $8,355,000 $4,281,000
Silicon Valley University (Calif., now closed) $33,761,000 $5,208,000 $465,000
Source: Columns two and three, ProPublica's presentation of the schools
forms 990; column four, that organization's reports on recent annual income
of those schools, for example here.

All four of them concentrate on the master's degree level, which comes with an instant work permit for the foreign student, while one waits a year at the bachelor's level to get that document. (While the master's students are the most numerous, most of these places also offer bachelor's degrees and instruction in English.) Further, students from India are prominent in all of them. Three of the universities seem to be floundering financially, while the fourth is not.

There are, however, differing back stories on each of the four. We will cover the California entities first, and then the two from Virginia.

Northwestern Polytechnic University (NPU), which lost 96 percent of its total revenue over a period of two years, as the table indicates, would seem to be a financial basket case, but it is not. It made so much money in 2016 and in earlier years, that it had a financial cushion of more than a fifth of a billion dollars when it last filed the IRS form 990 for 2017. By one obscure measure, it is richer than Harvard.

It apparently is careful with its educational spending, and its investments have been highly successful in a rising stock market. It could get along splendidly without any students.

Getting it accredited, however, even by the ever-tolerant ACICS, was a challenge and was covered in great detail by liberal news site BuzzFeed. That story carried the sub-head: "How one California university faked students' scores, skated by immigration authorities and made a fortune in the process".

Nearby Silicon Valley University was smaller and less-tightly run than NPU, and when a departing president took an unsecured $12.5 million dollar "loan", the place collapsed.

Had NPU suffered such a loss, it would have regarded it as an unfortunate rounding error.

Meanwhile, on the other coast, Virginia International University (a dozen miles or so outside the District of Columbia) took a third course; it sought to survive by:

  • Changing its name to Fairfax University of America (FXUA);
  • Firing its founder, Isa Sarac, a Turk, and quietly replacing him as president with a man with an Arab name, Ahmed Alwani;
  • Selling its campus, at well above its assessed value to the Mar-Jac Foundation, which is related to a huge Georgia chicken processing firm, Mar-Jac Poultry, of which Alwani is a board member; this gave the former VIU a cash infusion; and
  • Apparently switching its allegiance from a conservative Islamic cult led by the self-exiled Turkish cleric, Fethullah Gulen, now living in rural Pennsylvania, to the Muslim Brotherhood, of which Alwani's late father was a leading figure.

On January 28 and 29, the state regulators of private schools in Virginia held an audit of FXUA in keeping with a consent degree worked out between the state agency and the university; this was part of a possible license revocation process that could lead to a renewed license or to a terminated one. How this will play out is not yet known. The audit relates to various education issues, and appears to be largely unrelated to the institutional changes noted above.

ACICS has also been criticized by the U.S. Department of Education, as we noted earlier, for a lack of rigor in handling the VIU accreditation renewal process, a remarkable development from an otherwise passive entity on these matters.

The fourth school, Stratford University, of Falls Church, Va., apparently faced with a declining student body, closed campuses here in the States and decided to launch a new campus in the Kurdish part of Iraq, in Erbil. It already had a campus in New Delhi. Such campuses can make money for the school and can be used to recruit new students for the U.S. campuses.

One might think that if an entity in the United States wanted to build a factory in, say, Guatemala, that act would not complicate the firm's relations with stateside regulators. But higher education, or at least higher education if it involves ACICS, is different.

You see, ACICS had an outstanding show cause directive filed against Stratford regarding a thumping total of 107 different matters relating to the education provided and the reports thereon at three U.S. campuses and the one in India. And one of ACICS rules is that one shall not create a new campus until all the show-cause matters are settled (see the Stratford ruling here).

And, according to that long ACICS document dated December 19, 2019, Stratford worked out an agreement with a Kurdish educational entity and opened a campus in Iraq. At first Stratford argued that it was an English training institution, not a Stratford campus. ACICS pointed to a lot of evidence that it was a branch campus, despite Stratford's arguments.

Stratford now faces a February 14 deadline to submit a pile of evidence to avoid "withdrawal by revocation" by ACICS based on the Erbil issue and others.

ACICS has a pattern (or so it appeared to me) of writing fearsome show-cause letters to institutions and then, in the end, accepting whatever evidence is presented to it. Will that be the case this time or will ACICS actually terminate an accreditation, as it has rarely done in the past?

Why the Decline? There is a slight, nationwide decline in the arrival of all foreign students, which may be part of the picture. And there are other educational institutions offering similar classes, which are often of better quality. And perhaps recent stings orchestrated by ICE, such as the creation of the phony Farmington University in Michigan, may have had a useful impact.

Whistleblowing. In the meantime a whistleblower — probably a Kurd, as he refers to the location of the branch as being in Kurdistan, rather than in Iraq — with either excellent inside connections to the now-closed branch in Erbil or an uncanny ability to get his or her hands on inside documents, has written a 22-page letter with multiple attachments attacking both Stratford and ACICS on the matter. The writer seems more concerned about the opening of the branch, and then not admitting it, than on quality of education issues. This was emailed to me, numerous U.S. Department of Education people, and to state regulators in Virginia and Maryland a couple of days ago. (One of the Stratford branches is in Maryland.)

The cover note was addressed to Michelle Edwards, president and CEO of ACICS.

It will be interesting to read NPU's form 990 once it is filed by the school and then published by ProPublica — it is at least several weeks late. Does NPU still have $200 million-plus in the bank? It will be equally interesting to see what happens to VIU/FXUA and to Stratford in the coming weeks.

State Department Involvement. And while all of this is going on, all three of the surviving institutions can be sending out oodles of I-20 (proof of admission) forms to would-be alien students, setting up the creation of F-1 visas for the people involved.

It would make sense in the cases of VIU/FXUA and Stratford for Foreign Service officers to put such I-20s into a pending file, at least for a few weeks, until the smoke clears. Things seem to be coming to a head.