U.S. Federal Government Sues Utah’s Stevens Henager College Over Fraud, Fasification, Illegal Recruiting
In a move that is not entirely surprising to some, the United States federal government has sued a for-profit career institute from Utah, Stevens-Henager College, after two whistleblowers first came forward to reveal fraudulent recruiting practices that involved paying illegal commissions to student recruiters.
The suit also claims that Stevens-Henager employed faculty members who lacked the minimum qualifications required by the school’s accrediting agency (ACCSC), and that Stevens-Henager officials purposely falsified student attendance records and grades. The case is United States ex rel. Katie Brooks and Nannette Wride vs. Steven-Henager College, Inc., et al., Case No. 1:13-cv-00009 (District of Idaho).
Shady History Includes ‘Mormon’ Connection
Stevens-Henager, which has been heavily scrutinized by the federal government on more than one occassion, was earlier connected by CollegeTimes to Utah’s Church Of Jesus Christ Of Latter Day Saints after our team discovered a Mormon magazine from the 1980s had incidentally revealed that major leaders of the LDS church had attended a groundbreaking ceremony of one of the Henager campuses. (That archived article from LDSchurchnews.com was quickly deleted after our discovery, and now redirects to DeseretNews.com, a Salt Lake City based newspaper owned by the LDS church.)
Regardless of Henager’s unclear relationship with the LDS church during its 100+ year history, the college was more recently purchased by one Carl Barney, who also currently owns Independence University, CollegeAmerica, and California College – all for-profit institutes that lack regional accreditation.
According to a statement released by the Department of Justice, the DOJ, along with the Department of Education, allege that the college paid illegal incentives to recruiters based on the number of new students they were able to enroll. Federal law prohibits any such commission payments, in order to combat student loan default rates, the enrollment of unqualified students, and the waste of student loans and grant funds:
The United States has filed a complaint under the False Claims Act against Stevens-Henager College, Inc. and its owner, The Center for Excellence in Higher Education, for illegally compensating recruiters, the Department of Justice announced today. Stevens-Henager operates a chain of for-profit colleges in Idaho and Utah.
“Congress has made clear that colleges should not pay improper incentives to admissions recruiters,” said Stuart F. Delery, Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice and the Department of Education are working together to combat abusive recruitment practices that can harm students and result in the waste of taxpayer funds.”
The False Claims Act under which the lawsuit was initially filed, allows private citizens to file suit over false claims (fraud) on behalf of the government. The act then allows the government to take over the allegations, which is has done in this case. Interestingly, the whistleblowers in this case were two former Stevens-Henager employees from Utah, but they decided to file their federal lawsuit in Idaho instead. Stevens-Henager currently maintains several campuses in Utah and Idaho.
In order for any US colleges to offer federal student aid – such as loans and grants – schools must agree to not offer recruiters any commission or other incentives. The re-organized DOJ lawsuit claims Stevens-Henager ignored those rules for several years, and lied to the federal government, in order to receive more than $650 million in taxpayer money. An attorney from Salt Lake City with ties to the case said Henager recruiters even enticed homeless people to enroll in order to cash in on illegal commissions.
The Republic Report’s David Halperin first reported the whistleblower lawsuit in early April, before federal prosecutors decided to file their own (second) complaint:
Last year I obtained a letter that a Stevens-Henager employee wrote to government authorities alleging a lack of standards and integrity in the school’s recruiting. It read in part: “Our admission representatives are required to enroll anyone and everyone. All entrance and diagnostic testing has been eliminated… Toothless and homeless people are not marketable and will never pay back student loans. We still enroll them… Our director said, ‘Get 40 people and I don’t care what you say or do to get them.'”
Stevens-Henager and its affiliated colleges have established records of leaving their students deep in debt. For example, as of 2009, 40.2 percent of students of the Flagstaff, Arizona, campus of CollegeAmerica defaulted on their loans within three years. The figure was 38.8 percent at the CollegeAmerica campus in Denver, and a still-high 24.7 at the Stevens-Henager campus in West Haven, Utah. For comparison, the default rate at Michigan State University was 4.3 percent.
Although Stevens-Henager is described in the Justice Department’s news release as a chain of for-profit colleges, the college’s website describes it as a nonprofit institution, which was apparently a strategic business attempt the college made last year in order to avoid the seemingly ever-growing ‘for-profit education’ controversies.
Update 5/11/2014: It appears that the Standard Examiner, an Ogden, Utah based newspaper, has deleted this story from its website after having initially published the story via the automated Associated Press wire. (Editor’s Note: the main campus of Stevens Henager College is also – coincidentally – located in Ogden, Utah.)
Update 5/14/2014: Updated to clarify that SHC’s (historical) relationship with the LDS church is NOT official, and is in fact, unclear at best. The LDS church refused to comment on its relationship with both Stevens Henager College and Neumont University when contacted via email by the CollegeTimes team.
Use this link: https://studentaid.gov/borrower-defense/
Please update me on you efforts to get out of this situation. My daughter got a two year assoc. degree, and graduated with honor’s 8 or 9 years ago. She never got a job with this. She told me that she owes $30,000. The debt collection company is adding interest. They are garnishing her tax refund.
I would hope that something can be done.
Have you learned anything that may help
call Marshall 208-251-1967
Please update me on you efforts to get out of this situation. My daughter got a two year assoc. degree, and graduated with honor’s 8 or 9 years ago. She never got a job with this. She told me that she owes $30,000. The debt collection company is adding interest. They are garnishing her tax refund.
I would hope that something can be done.
Have you learned anything that may help
call Marshall 208-251-1967
I had great credit until this. Now I’m pregnant jobless and in debt… Thanks Steven heneger or Independence whatever your name is today.
There has to be a way to make them at least reduce this debt.
I have legit student loans but owing them another 10k is very fishy.
Any way to get into the class action before they try to garnish wages and harass me?
I took graphic design classes in high school and thought that it would be a good thing for me to try as a job or career. Because of my disabilities I am unable to drive to go to any college that wasn’t online based. My GPA isn’t high enough anyway due to learning disabilities and me not being considered low functioning enough in the school’s eyes for an IEP. I also happen to live in a small town where they didn’t exactly have a graphic design course or degree at the local community college. My options were pretty thin.
Yes I don’t have anyone to blame but myself, however, lying about their career services helping you, or the fact that it doesn’t really exist is just awful.
Oh and their tutors and some of their instructors are a joke. I had like two good teachers, and I know for a fact that at least one of them doesn’t work there anymore. Tutors will refuse to help you and then say that you have notes. One of them even did IT work, completely screwed up the computer and didn’t know what BSoD stood for, which if you are supposedly an IT you should know that acronym. I have family that isn’t tech savvy that knows that acronym. My Associate Dean was the world’s biggest flake. I asked about auditing a class, it took him 6 months to get back to me, and for him that was normal.
As a warning to anyone thinking about going here, go elsewhere. You’d be better off using the money as toilet paper.
In the beginning, there were 5 of us in the program. Two of them started a couple months before the 3 of us that started when I began. We acquired 3 or 4 additional students while I was there. All of us were in the same classroom together, with ONE professor teaching ALL of the classes. She actually quit after the first couple of months, and they brought in a new professor to take her place. Honestly, one professor cannot properly teach all aspects of graphic design (which involves using several different software programs), especially to students that were at different points in the program. We basically worked independently, as we were enrolled in different “courses,” but all used the same classroom. As time went on, it became more and more evident that the professor was not capable of teaching some of the month-long courses that were required. I felt like I was teaching myself, and there was one student that was far more proficient at most of the things being taught that would help the rest of us. As I became more aware of my situation, I chose to leave and transfer to a more reputable school. It was pure luck, in my opinion, that the school that I transferred to accepted Stevens Henager credits toward their “general” elective classes. I know others that transferred that received no credit, as their credits are NOT ACCEPTED by most colleges, as they would lead you to believe when you’re enrolling.
Now, here I am, 10 years later, and I am still struggling to pay my $30k of student loans that I racked up. I don’t feel like I received anything for what I paid for. I honestly hope that they are shut down so that no one else has to be in this situation.
here you will find the information and links to file a complaint with the department of education. I worked there for several years and thank God everyday I am out. They are not in compliance by any means and manage by fear of the constant threat of being fired. Now it is up to 6 starts for enrollment and 22 packages per month to keep your job. I can remember them trying to enroll a blind couple in an online program as well as 3 Alzheimer’s patients whose children had called in and demanded we stop contacting them. In the last 3 years at least 8 people have been fired for fraud 4 in financial aid in Phoenix that packaged students who had cancelled their enrollment to keep their jobs. They figured out how to manipulate the forms sent out to students so they could sign the student’s name to them. STAY AWAY from this school. And if there is a way to join the lawsuit or at least get on the list to testify please post
Thanks for this information, going to check it out to see what I can do.
I really wished I would have looked up info about all this before going to Stevens-Henager… “Nationally Accredited” of course sounds better when you don’t know the differences… All the lies and crap they sold me, and how they said my VA GI Bill would cover almost all the costs. It’s funny/sad how it went from 90% covered, to… well it should be about 80% actually, to.. well… it’s probably going to be more like 75%… To when I got the actual papers from the VA and they said it’s only 50% covered. Also that I would be getting close to $900/mo from the VA (housing allowance) since I was an online student. And somehow that number ended up being only $345/mo. And we’re not even going to get into how worthless some of the instructors are… And the tutoring, my first and only time in the ‘student success center’ (their tutor lab, run by current students) I did not understand programming and I was told by a tutor, “Don’t worry about learning programming, just do the homework to pass the class and you’ll be ok”… WTF?? Don’t worry about actually learning?? If that’s the case, why am I going to school??? So in summary… having my schooling 90% paid for, and getting $900/mo to live off of, and being ‘Nationally Accredited”, all sounded amazing, why wouldn’t I signup and go to their college? That’s what I get for not doing my research before signing my life away and getting next to nothing out of it, and now finding out the paper it’s printed on is worth more that the actual bachelors degree…
i went there for probably 5 months and when i decided that it wasnt worth it anymore i quit, the school continued to take money from the government i am hoping i can join this lawsuit and get some of that money back from them to the government so i dont have to pay for them.
If your students dropped the course or if you got a certain amount of F grades, then it was reflected in your rating. There was a meeting held where the school wanted us to meet 95% passing and 95% retention rate. We were told the school understood that the majority of students who fill out the evaluations are the ones who are upset with the course, thus low ratings. Yet they use these ratings against their instructors. I had one student, Joe Callier, outright lie on my evaluation. He stated that I was the worst instructor ever, that I should have held 2 live chats (we are only required to hold one)and that I did not go over the material. All lies. This student did not do his work and went to the dean, Marilee Hall, to ask for permission to make up late work because he was busy with his job. Marilee Hall discussed NOTHING with me. Instead I get an email stating that I am to accept this student’s late work. After the course ended and I read this evaluation, I complained to Marilee Hall. It was obvious this student lied, yet his evaluation was used to calculate my ratings. At that point, I was locked out of my classroom. I got a call the next day from Marilee Hall stating they would no longer offer me classes.
This school is a joke and I am glad they are being sued. They need to be shut down. According to Marilee Hall, “the school works with their students,” and that the students are our customers. That just translates into “do everything you can to please the students because they are paying for the course, so just pass them.” If you want a high rating, you pretty much have no choice but to give passing grades, because if you flunk them it goes against you.
I was told I had to contact the students who did not enter the classroom. Most of the times, the phone #s were not accurate in their system. Emails bounced back, but yet the instructor was held responsible if they could not get ahold of the students. Calling students every week is borderline harrassment. I have taught at several schools. None of them required us to call them as much as Stevens Henager.
Please shut this school down! PLEASE!