Governments Rain Goodies on Some Marginal Universities

By David North on July 16, 2020

Governments have recently rained goodies on four marginal universities, all of which essentially major in getting visas for foreign students and have, or have had, accreditation or licensing problems.

Perhaps the least appropriate of these goodies was an award of a federal Payroll Protection Program (PPP) loan to Northwestern Polytechnic University in Fremont, Calif. NPU got between $350,000 and $1 million from the program that is supposed to help small businesses meet their payrolls at the time of the virus crisis. (CIS has also received such a loan.)

NPU has all of 50 students or so, but has $200 million in assets, enough to operate without a penny of income of any kind for 31 years, as we reported earlier. It has $4 million in assets for every student, a number that no other American university can come close to matching. IRS regards it as a non-profit entity.

NPU needs a loan like the Pacific needs more water.

NPU has had accreditation problems in the past as BuzzFeed explained in great detail in an article headed "Inside the College that Abolished the F, and Raked In Cash".

NPU, like three other interesting institutions that snared the PPP loans, is accredited by the Accrediting Council for Independent Colleges and Schools (ACICS), a not-very-demanding rating group that was just about put out of business by the Obama administration on the grounds of low standards, only to be rescued by Betsy DeVos's Department of Education.

The other three marginal institutions getting these Small Business Administration loans were:

  • Fairfax University of America. Formerly Virginia International University in Fairfax, Va., it was previously associated with the Gulen movement, a conservative Muslim cult. DeVos' rescue of ACICS indirectly saved its accreditation. Among VIU's unusual financial arrangements was its gift of the campus to a partially owned, for-profit subsidiary that guaranteed that the university pay some $50,000 in property taxes each year that it need not have paid had it owned its own campus. Odd.
  • Lincoln University. Located in Oakland Calif., its handling of finances has rewarded it with the rare "severe" rating in the "heightened cash monitoring" reports of the U.S. Department of Education; it also used the H-1B program at one point to secure an H-1B slot for a new president, but did not change the name of its president on its webpage. When you look for it on Google, you find this message "Their accreditation status is listed as 'Compliance Warning'".
  • Stratford University. Located in Falls Church, Va., Stratford is in the middle of an accreditation wrangle with ACICS, which alleges that Stratford opened a campus in the Kurdish part of Iraq without getting the needed clearance from ACICS. Years earlier, Stratford, though a small operation, secured more Optional Practical Training slots (727) than the entire Ivy League combined (341).

While Fairfax and Lincoln got loans in the $350,000 to $1 million category, Stratford, which has more campuses than the others, got its loan in the $3 million to $5 million range.

This is not the end of the list of happy events for these places. On July 17, the school regulatory agency in Virginia is scheduled to end its licensing dispute with Fairfax University. The State Council on Higher Education in Virginia (SCHEV) has been reviewing its license for a long time, and had scheduled a "partial audit" for earlier this year. SCHEV staff concluded (see pp. 48-49 here) that this audit showed that Fairfax had met its requirements.

Meanwhile Stratford is suing ACICS over the Iraq school issue (while the school in Iraq is suing Stratford) and it has secured a temporary injunction from the judge in the first case, which has tied ACICS' hands in the credentials battle. For more on this dispute, see here.

It already had been a good month for these four schools, and then the administration did an about-face and decided that foreign students need not attend classes in person after all.

The author is grateful to CIS intern Joshua Timko for his research assistance.