Did Kaplan Lobby to Deregulate For-Profit Colleges While One of Its Schools Defrauded Students?

On February 21, 2012, Truthout reported on North Carolina Senate Bill 685, which transferred regulation of for-profit colleges from the North Carolina Community College System to a new board of proprietary schools staffed by for-profit college executives, allowing an industry rife with fraud and abuse to regulate itself.

The bill was sponsored by North Carolina Republican state Sen. Tom Apodaca and shepherded through the legislature by North Carolina Speaker of the House Thom Tillis. As reported by Truthout, in 2011, Apodaca was a member of the American Legislative Exchange Council’s (ALEC) education task force, and Tillis was ALEC’s 2011 Legislator of the Year.

New information appears to tie Washington Post-owned Kaplan University to this legislation deregulating for-profit colleges at the same time Kaplan was misleading students about the accreditation status of a dental assisting program they ran in Charlotte. On April 26, 2012, Republic Report revealed that Kaplan University was a member of the ALEC education task force from about August 2010 to August 2011.

This places Kaplan on the ALEC task force at the same time as the bill’s sponsor, Senator Apodaca, and places Kaplan on the task force at the same time SB685 would have been written and introduced in the North Carolina legislature. The bill was introduced by Sen. Apodaca in April 2011 and signed into law by the governor on June 27, 2011.

Read more: The Public Intellectual

According to followthemoney.org, in 2010-2011, at the time SB685 was being crafted and introduced as legislation, Kaplan Higher Education employed lobbyists in North Carolina from the firm Capstrat; specifically, Leslie Bevacqua Coman, Doug Miskew, Paul Mahoney and John Peterson. According to documents on file with the North Carolina secretary of state, Kaplan paid Capstrat $10,000 in 2009, $15,000 in 2010 and $12,500 in 2011.

Documents on file with the North Carolina secretary of state also indicate that on June 30, 2011, three days after SB685 was signed into law, John Carreon, Kaplan’s vice president for state regulatory affairs, terminated Kaplan’s remaining lobbying contracts with Capstrat. Several weeks later, Kaplan left ALEC.

The timing of Kaplan’s termination of the lobbying contracts with Capstrat after three years, and the timing of Kaplan’s entry into and departure from ALEC, appear to be related to SB685.

On May 14, 2012, I contacted Peterson, one of the Capstrat lobbyists. I asked him two questions: One, did Capstrat work on SB685 in any capacity, either with ALEC, Representative Tills, Senator Apodaca or any other entities, for-profit, public or nonprofit in the year 2011? And, two, if Kaplan did not directly or indirectly work on SB685 during the year 2011, when it was written, introduced and passed, then what did Kaplan pay Capstrat to do in 2011, and what did Capstrat actually do for Kaplan as a lobbying organization?

Peterson did not deny or refute the assertion I made that Kaplan hired Capstrat to lobby on behalf of SB685. Rather, Peterson cordially told me he would need to talk to his boss, Coman, and that he would definitely call me promptly the next day. Peterson never called back. Consequently, it is still unexplained why a document on file with the North Carolina secretary of state showed Kaplan terminated Peterson’s lobbying contract on June 30, 2011, just three days after SB685 was signed by North Carolina’s governor.

Sadly, as we now know, at the same time Kaplan was presumably lobbying on behalf of SB685 to deregulate for-profit colleges in North Carolina and setting up a stacked board that actually mandated for-profit colleges to be represented on the board, it was also running an unaccredited dental assisting program in Charlotte, North Carolina. As reported by Truthout, in November 2011, Kaplan was exposed by a local TV station for misrepresenting the accreditation status of its dental assisting program to its students, cheating them out of the careers they had hoped to achieve and for which they paid and studied. Reporter Jim Bradley found that not only was Kaplan’s dental assistance program unaccredited, incredibly, Kaplan had never even applied for accreditation, despite being eligible to do so.

The North Carolina Community College System dropped its investigation of Kaplan after Kaplan volunteered to surrender its license to operate the dental program and provided students with a settlement estimated at $5 million. The North Carolina attorney general failed to bring any criminal charges, even though the president of the college was caught on tape admitting students had been misled. The failure of both entities to take any substantive action, along with the new board of proprietary colleges, now gives the green light to for-profit colleges in North Carolina to continue to exploit veterans, minorities and the poor at ruthless rates. The rule of law is now the rule of money, and North Carolina has become a haven of sorts for the cruel and predatory for-profit colleges. Interestingly, the for-profit education company Apollo Group was also snaking around the state of North Carolina during 2011.

In the past year, Kaplan also had accreditation withdrawn at a radiology program, announced the shuttering of a nursing program after being put under review and had a medical assisting program placed on probation. What’s more, Kaplan settled three whistleblower lawsuits, was the subject of two recent class-action lawsuits, is the continued legal subject of an ongoing Equal Employment Opportunity Committee lawsuit for racial discrimination, is the subject of a Senate inquiry and is under investigative demands from four state attorneys general. Amazingly, in light of all of this controversy, Donald Graham, the major stockholder of the company, says that Kaplan is doing low-income and minority students a favor.

And now, thanks in part to Kaplan’s lobbying, North Carolina has a shiny new state board of proprietary schools where for-profit colleges regulate and police themselves.