What’s up with Universities that Change Their Names and Concentrate on Foreign Students?

By David North on December 6, 2023

From time to time we report on marginal universities — often with accreditation problems — that concentrate on international students who, in turn, are often getting government-subsidized jobs through the Optional Practical Training program. (The employers of U.S. graduates do not get the tax breaks that go with the OPT program.)

At least three such schools have changed their names in recent years, something universities rarely do. One of them has been in the news lately and two others should attract media attention. They are:

Bay Atlantic University. This school is very near the White House in Washington, D.C., and concentrates on teaching English to foreign students and also runs some interesting public policy forums. It is an outreach entity owned by a Turkish for-profit that runs many schools in that nation. It used to be called BAU University, with the letters standing for the name of that corporation in Turkish.

It has been in the news (if you read very carefully) because five people associated with it gave controversial $2,000 contributions to the campaign fund of Mayor Eric Adams of New York City at a time when the government of Turkey was lobbying him for help in getting a safety approval for Turkey’s imposing new consulate, which is near the United Nations. The five subsequently got their money back from the campaign.

It is illegal for foreign nationals to contribute to U.S. political campaigns.

The little university had previously had accreditation problems with its accreditor, ACICS (whose recognition as an accreditor is about to be terminated by the U.S. Department of Education); the university, as we reported at the time, irritated ACICS by changing its name without the latter’s permission, and by filing a financial report (in the absence of its CFO), that did not add up. It has since picked up a different accrediting organization.

San Francisco Bay University. Formerly known as Northwestern Polytechnic University, this name is also used by a prominent university in China that has been tied to the Chinese People’s Liberation Army. For years, the California operation was a highly successful visa mill, operating with low standards and large enrollments of foreign students. It, too, was accredited by ACICS, a process that was reported by Buzzfeed News with this headline: “Inside The College That Abolished The F And Raked In The Cash: How one California university faked students' scores, skated by immigration authorities, and made a fortune in the process.”

The article continued: “It has no full-time, permanent faculty, despite having a student body larger than the undergraduate population of Princeton.”

At one point, it was playing host of more than 9,000 students, mostly from India, and raking in money by the bundles, all the while being regarded as a non-profit institution by the sleepy and/or overworked people at IRS. The presidency of the Fremont, Calif., institution changed from George Hsieh to his son, Peter, a few years ago.

Recently it decided to down-size and coast on its huge endowment. We recently reviewed its November 2022 filing with IRS, the form 990, which for non-profit entities plays the role of the form 1040 for individuals. It showed:

  • An increase from 2021 to 2022 of its net worth from $261 million to $294 million;
  • Program revenue (i.e., tuition) of only $708,280;
  • When that number is divided by the average tuition (found on its website) of $17,000, that suggests 42 full-time students;
  • Compensation for Peter Hsieh of $759,719 for running a school with 42 or so students; the website now claims 61 of them. The 42 could fit into a two-room school house;
  • Assuming 42 students, the endowment per student is roughly $7,023,000, compared to Harvard’s roughly $2,200,000; and
  • For 2016 its income (revenue minus expenses) came to more than $53 million.

Maybe the IRS should examine whether or not this is a genuine non-profit entity.

Fairfax University of America. The third institution in this set, which once was called Virginia International University (VIU), also has had a tie to Turkey and was, and is, accredited by, you guessed it, ACICS. Once upon a time, its student body numbered in the low thousands; that number has dwindled to a couple of dozen.

VIU was formerly run by the followers of Fethullah Gulen, a conservative Islamic cleric from Turkey living in exile in rural Pennsylvania. More recently it has been run by, and supported by, money associated with the Muslim Brotherhood, which is a different faction in the Muslim world. Gulen has been charged by Turkey’s dictator, Recep Erdogan, with fomenting an attempted coup in that country a few years go.

Fairfax University’s ACICS accreditation is due to run out on December 31, as ACICS will go out of business. It seems unlikely, though it is possible, for Fairfax University to secure another accreditor by that date. In Virginia, a college or university needs to be accredited to be licensed by the state; this is not true in all states.

A perceptive reader reading this report will notice that although all three (or all six) of these institutions operate with the blessing of the Department of Homeland Security in that all deal with foreign students, that there has been no mention of any DHS regulation of any of them. That is not an oversight on my part; the DHS entity that works with universities with foreign students is a totally passive one.