Washington Post 2010 Annual Report Download - page 25

loan funds at private sector higher education institutions and, potentially, proposing additional legislation related to the
sector. Although Kaplan Higher Education has completed its production of documents requested by the HELP Committee,
at this time the Company cannot predict the ultimate impact that the investigation may have on Kaplan.
Program Reviews, Audits and Investigations. Kaplan’s schools are subject to audits or program compliance reviews
by various external agencies, including the Department of Education, its Office of the Inspector General and state and
accrediting agencies. If the Department of Education or another regulatory agency determines that an institution has
improperly disbursed Title IV or state program funds or violated a provision of the Higher Education Act or state law or
regulations, the affected institution may be required to repay such funds to the Department of Education or the appropriate
state agency or lender and may be assessed an administrative fine and be subject to other sanctions. Although Kaplan
endeavors to comply with all federal and state laws and regulations, Kaplan cannot guarantee that its interpretation of the
relevant rules will be upheld by the Department of Education or other agencies, or upon judicial review.
In September 2008, the Department of Education began a Program Review at Kaplan Higher Education division’s
CHI-Broomall campus. The Program Review is ongoing. The reviewers have completed their field work. CHI-Broomall and
Kaplan have responded to a preliminary report issued by the Department of Education, have responded to a
February 12, 2010, request by the Department of Education for additional information and are cooperating fully in the
review. The Department of Education has not yet issued a final report on this review. No assurance can be given that the
Department of Education’s final report will not have a significant adverse effect on Kaplan’s ability to continue to operate
this school. See further discussion in Item 3. Legal Proceedings.
The Department of Education also began a Program Review in October 2007 at Kaplan’s Higher Education division’s
Pittsburgh location. Kaplan has responded to all requests for information and is cooperating fully in this review. The
Department of Education has not yet issued a final report on this review. No assurance can be given that the Department
of Education’s final report will not have a significant adverse effect on Kaplan’s ability to continue to operate this school.
In May 2008, the Department of Education also conducted a Program Review at Kaplan’s Higher Education division’s
Baltimore location. The Department returned to complete its review in April 2010. The Department issued its findings in
August 2010. The Department found that the school failed to document some student dependency overrides and failed to
properly resolve conflicting information in student financial aid files. The school responded to these findings in September
2010. No assurance can be given that the Department of Education’s final report will not have a significant adverse
effect on Kaplan’s ability to continue to operate this school.
In September 2009, the Department of Education began a Program Review of Kaplan University at its offices in Fort
Lauderdale, FL. Kaplan University is continuing to respond to all requests for information and is cooperating fully in the
review. The reviewers completed their field work, are reviewing documentation already submitted and are gathering
additional documentation. The Department of Education has not issued the final Program Review report. No assurance
can be given that the Department of Education’s final report will not have a significant adverse effect on Kaplan’s ability
to continue to operate this school.
In January 2010, the Department of Education began a Program Review at Kaplan Higher Education’s Bauder campus.
That same month, the Department of Education issued an expedited final determination letter, closing its Program Review
with no significant finding.
The Department of Education conducted a Program Review at Kaplan Higher Education’s Phoenix campus on February 7,
2011. The Department of Education conducted an exit interview at the end of this review and indicated that, at that time,
they had no findings. No assurance can be given that the Department of Education’s final report will not have a
significant adverse effect on Kaplan’s ability to continue to operate this school.
In February 2011, the Department of Education announced it will be conducting a Program Review at the Kaplan Higher
Education’s Brooklyn, OH campus on March 21, 2011. No assurance can be given that the Department of Education’s
final report will not have a significant adverse effect on Kaplan’s ability to continue to operate this school.
Institutional Accreditation. Accreditation is a process through which an institution submits itself to qualitative review by
an organization of peer institutions. Pursuant to the Federal Higher Education Act, the Department of Education relies on
accrediting agencies to determine whether the academic quality of an institution’s educational programs is sufficient to
qualify the institution to participate in Title IV programs. As noted previously, to remain eligible to participate in Title IV
programs, a school must maintain its accreditation by an accrediting agency recognized by the Department of Education.
In 2010, no Kaplan Higher Education division school received notice from its institutional accreditors indicating that the
school’s accreditation was being withdrawn or that the school was being issued an order to show cause why its
accreditation should not be withdrawn.
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