Weighing in on the IG’s Compliance Audit of Western Governors University

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$713 Million in Federal Financial Aid to be Paid Back?

The U.S. Department of Education’s Office of Inspector General has released the results of a compliance audit of Western Governors University. Citing concerns about an inadequate faculty role, the inspector general called for the department to make the university pay back at least $713 million in federal financial aid.

An Innovative Approach to Higher Education

WGU was formed in 1997 by Governors of 19 Western States. They started a unique competency based approach to higher education by allowing students to demonstrate knowledge in certain subjects and by advancing at their own pace. If a student is competent in a certain area they use this knowledge to complete assessments and complete their degree faster.

Through the years, many in the higher education industry have held WGU up as a shining example of how college could be made more affordable. When President Obama called for more college affordability and for a $10,000 Bachelor’s degree in 2012, many in the Department of Education pointed at WGU as an example of how this could be done and the Obama administration praised WGU as an innovator. This is why it seems strange and shocking now that the Department’s five-year compliance audit of WGU has resulted in these adverse findings.

Distance-Education Programs Found Ineligible for Title IV Funds

The main crux of the findings is that WGU didn’t follow requirements that distance-education programs be designed to provide students with regular and substantive interaction with their instructors and that those courses instead should have been labeled as correspondence courses which aren’t eligible for Title IV funds. According to the report, “none of the courses could reasonably be considered as providing regular and substantive interaction between students and instructors. Therefore, Western Governors University became ineligible to participate in the Title IV programs as of June 30, 2014.”

Round Pegs and Square Holes

WGU rebutted the report, saying

“Western Governors University respectfully, but strongly, disagrees with the findings in the Office of Inspector General’s draft audit report. WGU is, and has always been, fully compliant with Department of Education regulations since our founding 20 years ago by 19 U.S. governors,” the university said in a May letter to the inspector general. “Our innovative learning model, which has the support of the law, the department, our accreditor and policy makers, is validated by the outcomes WGU is delivering for our 82,000 students and 81,000 graduates.”

Scott D. Pulsipher, the President of WGU stated that The audit relies on “a very narrow application of the regulatory language,”

Terry Hartle, senior vice president for government and public affairs at the American Council on Education, said he hoped the department would reject the recommendations from the inspector general, which he said had applied an obsolete, 20th-century definition to a 21st-century institution.

“At the end of the day, we need a clear federal policy toward and definition of ‘online education,’ ” he said via email. “Until we have that, we are dealing with round pegs and square holes.

Will the Title IV Compliance Audit Findings Stick?

Will these findings by the IG stick and will WGU have to make the large refund to the Department?

Experts on higher-ed policy don’t expect Betsy DeVos to follow the recommendations. “There is no administration that would ask WGU to give back the money,” stated Amy Laitinen, director for higher education with the education-policy program at New America.

“We have every expectation,” said Mr. Pulsipher, “this will be resolved appropriately.” The university’s model is different, he said, and sometimes misunderstood. But that “doesn’t mean what we do doesn’t work,” he said. “That innovation will continue to win the day.”

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