U.S. Department of Education investigating Temple business school scandal

The U.S. Department of Education is investigating whether Temple University's business school misled prospective students about the quality of its online M.B.A. program by providing false information for a magazine's rankings, a department official said Tuesday.

If the inquiry finds Temple at fault, students could have their federal loans forgiven under a provision known as "borrower defense," the department official said, and Temple could be on the hook for the money.

"We're looking at what misrepresentations did occur, and what impact that had on students who used federal programs and federal dollars to seek their education there," said the department official, who asked not to be named because the department does not discuss open inquiries.

The department's probe was launched earlier this year, before the university disclosed findings of an investigation that determined the Fox School of Business, sometimes knowingly, provided false data to U.S. News and World Report for its rankings.

In a three-page letter dated May 24 and obtained by the Inquirer and Daily News, Nancy Rosario, an enforcement investigator in the federal student aid department, asked Temple a series of questions, seeking data on online M.B.A. enrollment, program marketing, recruitment practices, and data provided for the rankings.

Temple president Richard M. Englert said in a July 9 letter to the Temple community that the university was providing information to various agencies, including the Education Department, about the issue.

Temple spokesperson Ray Betzner said Tuesday evening that the university is complying with the department's request for information.

"At the same time, the [university's] examination of the Fox School's rankings data and processes continues," Betzner said.

Several other probes also are underway. The Pennsylvania Attorney General's Office announced last week that it was looking into the matter. One accrediting agency also said it is investigating, while another is monitoring. And some students have filed a lawsuit, claiming that they had been defrauded and that the reputation of their degree had been harmed.

The federal Education Department probe is in its initial stages and is ongoing, the official said. It was prompted by the student lawsuit (filed earlier this year), complaints, and news coverage of misreporting, the official said.

Problems started in January when U.S. News dropped Temple's online M.B.A. from its rankings after the school self-reported that it had provided inaccurate data. The program had been ranked No. 1 for the previous four years, and the school had been touting that ranking. The university hired a law firm to investigate how the misreporting occurred.

Earlier this month, Temple released the firm's findings, including that the business school supplied false data — sometimes knowingly and over a period of years — to the magazine, and that the false reporting was not contained to the online M.B.A. program. A "rankings-focused" strategy led to some of the misreporting, the firm found. Temple forced out its long-time business school dean, Moshe Porat, and announced a series of steps to ensure that such misreporting does not reoccur, including hiring an external auditor.

The Education Department will look at whether Temple misled students to get them to enroll in the online M.B.A. program and whether they suffered harm as a result, the official said.