In 2009, Grand Canyon University spent $2177 per student on instruction and $3389 per student on marketing.
Rancho Santa Fe’s Dr. Michael Clifford is a self-professed expert on for-profit and online universities. On one of his websites, he calls himself a “business/finance/ethics strategist,” a catalyst in creating “high-quality education companies.” As a venture capitalist, he pumps money into often ailing schools, then helps direct the hoped-for resuscitation.
He makes a point of being a born-again Christian, and the schools he finances are often religion-based. He never went to college but uses the title “Dr.” because of his honorary doctorates, including one in sacred theology.
He oversees a web of financial enterprises, many of them beginning with the word “Significant” — Significant Federation, Significant Ventures, etc. He is a media darling, quoted exhaustively on the topics of for-profit and online universities, religion, and ethics.
Bridgepoint is “an absolute scam,” said U.S. senator Tom Harkin.
Trouble is, some folks don’t think Clifford-financed schools are of the “high quality” he claims. These skeptics include investigators from a United States Senate committee, the Department of Education, the Department of Justice, and university accreditation bodies. Clifford boasts of his savvy, but public records show the schools he touts most frequently have significant — hmmm — problems. I reached him by phone and began an interview by asking a few questions. He got indignant, hurled some insults, and hung up.
The website of Significant Federation relates how, through various entities, he purchased the Memphis-based Christian school Crichton University and rebranded it Victory University. But on June 28 of last year, the school’s accrediting body, the Southern Association of Colleges and Schools, slapped Victory with a 12-month warning. The institution had failed to provide evidence that it has a sound financial base, according to the Southern Association disclosure statement.
The matter comes to a head this June. I asked Kenneth Kinney, Victory’s director of marketing, what will happen if Victory loses accreditation. “We don’t anticipate a negative result,” he said. He would not say whether Clifford’s funding mechanism has provided more capital.
“I helped found American Way Education,” which owns Los Angeles College International, Clifford told a publication in 2007. But in December 2012, the college closed down. People are told to call another school for information. But that second school says it has no idea what happened or whom to call; it is just a repository of L.A. College transcripts.
In 2008, a Clifford entity paid $5.25 million to buy a venerable but ailing Cleveland college out of bankruptcy. Clifford renamed it Chancellor University and marketed it by stressing that John D. Rockefeller and Harvey Firestone had been graduates. According to the publication Crain’s Cleveland Business, Clifford slashed undergraduate tuition by 30 percent, lowered graduate tuition by 14 percent, boosted the full-time faculty, and created 30 new online courses.
Jack Welch invested in Chancellor University.
The Significant Federation website raves how Clifford recruited “world-famous [retired General Electric chief executive officer] Jack Welch to create the only Jack Welch Management Institute on the planet” at Chancellor. Welch bought a 12 percent share of Chancellor.
The website features photos of Clifford and Welch beaming. But I can’t find mention that in 2011, Welch sold his institute to another for-profit school. According to the Wall Street Journal, Welch was concerned that Chancellor wasn’t the right academic home.
There was good reason for Welch’s concern. “In September 2009, Chancellor approached local homeless shelters to recruit the homeless, who are eligible for federal student loans and grants,” reported Crain’s Cleveland Business. One shelter director said Chancellor recruiters gave enrollment pitches to homeless residents, “but I don’t think they actually took the bait.” The director later told Chancellor to go away.
In 2010, the North Central Association Higher Learning Commission ordered Chancellor to show cause why its accreditation should not be rescinded. The next year, the commission cleared the university but, in June of last year, reinstated the show-cause order. Chancellor is resigning from the commission; the school’s accreditation ends in October of this year. The school did not respond to calls for comment.
Clifford reportedly left the Chancellor board in 2010. Similarly, he is no longer involved in Chula Vista’s United States University, which he purchased in 2009 when it was named InterAmerican College. Last month, the for-profit university paid a $700,000 fine to the federal government for falsifying records so students could get Pell Grants. The former financial aid director faces criminal penalties.
“In November of 1993, Clifford was contacted by a friend in Phoenix, Arizona, to help raise donations for Grand Canyon University, which was about to close its doors,” says the Significant Federation website. “Clifford became the catalyst to organize the money, management, and marketing” for the school, which was changed to a for-profit institution. Grand Canyon is a religious school. According to a study by the United States Senate’s Health, Education, Labor, and Pensions Committee, the dean of the Christian Studies department commented on the takeover, “They were not going to make decisions based on our mission, our values, and our history. They were going to make them for one reason. Profit. Period. So why keep calling yourself Christian?”
The dean was fired, but Grand Canyon prospered financially. When the company went public in 2008, with Clifford holding 9 percent of the stock, it was already under investigation by the Department of Education for possibly basing recruiters’ pay on how many people they enrolled. This is a festering issue with for-profit universities. According to the company’s 2012 report, the Department of Education has requested additional information on enrollment-compensation practices, but Grand Canyon is convinced it follows the law.
The Senate committee unearthed interesting details: 58.5 percent of 2008–2009 students had withdrawn by 2010, and in 2009, Grand Canyon spent $2177 per student on instruction and $3389 per student on marketing.
Finally, Clifford and another entrepreneur formed the predecessor of the company that Clifford calls “a blockbuster”: San Diego’s Bridgepoint Education. Its accreditation is in danger, and four states, the Department of Education, and the Department of Justice are probing it. Senator Tom Harkin, chairman of the Senate committee, called Bridgepoint “an absolute scam.”