Temple Fined $700,000 in Rankings Scandal

Temple University will pay the U.S. Education Department $700,000 to settle the department's complaints about the way the university lied to U.S. News & World Report for years about the online M.B.A. offered by its Fox School of Business, in a successful effort to obtain top rankings and to attract students.

The university lied about scores on the Graduate Management Admission Test, the grade point averages of admitted students and other key factors. Temple did not admit guilt but has admitted to most of the facts set out by the Education Department.

"The department believes this information, including, inter alia, (1) the number of Fox School entrants providing GMAT scores as part of the application process, (2) the mean undergraduate G.P.A.s of students admitted to certain programs offered by the Fox School, (3) the number of offers of admission extended by the Fox School to applicants, (4) the debt levels of Fox School students who borrowed loans to pay tuition, and (5) the ratio of full-time technology support personnel to supported faculty members at the Fox School, caused U.S. News & World Report to rank Temple’s online M.B.A. and other programs substantially higher than it would have if Temple had provided accurate information," said the agreement resolving the complaint.

"Temple’s Fox School knowingly, intentionally and substantially misrepresented the nature of certain of its educational program by advertising the false rankings by U.S. News & World Report thousands of times via online portals, social media, fully wrapped buses and newsstands, highway billboard signs, and advertisements at airport terminals, on trains, at train stations, in magazines, in newspapers, and on television and radio. The department believes this advertising wrongly increased Temple’s enrollment and revenue, deceived consumers, and unfairly harmed competitors," the agreement said.

Temple will have to pay more than $700,000. The agreement states, "Temple specifically acknowledges that this release does not include any claim by the department for recoupment from Temple arising from the department’s payment of borrower defense claims submitted by federal student loan borrowers due to Temple’s alleged conduct."

“We know many students rely on rankings to make decisions, and in this case students were presented deliberately falsified information by Temple’s Fox School,” said a statement from Education Secretary Betsy DeVos. “It has been our commitment from day one to hold all higher education institutions -- nonprofit, proprietary and public -- accountable to the same standards and to ensure students are protected from bad actors who would deceive students about the quality of their education programs. Fraud can happen anywhere, and fraud must be stopped everywhere.”

The comment was widely seen as pro-for-profit higher education. While Temple is nonprofit, the for-profit sector welcomed a statement applying the same standards to nonprofit and for-profit higher education.

A statement from Temple said, "We are grateful to have reached the conclusion of this matter with the U.S. Department of Education. Throughout the process, Temple was entirely transparent and took swift actions to protect the interests of our students, donors and the university. As part of broad-sweeping corrective measures, Temple implemented a robust set of practices to ensure that data misreporting with respect to rankings will never occur again. This included, for example, establishing an internal Data Verification Unit charged with overseeing the university’s data submissions, making online and telephone hotlines available for the reporting of malfeasance, retaining a third-party auditor for data submissions, and investing in increased training."

Temple estimates that, prior to this agreement, it has spent at least $17 million on "remediation costs" from the scandal.

How the Scandal Grew

Many other colleges have been caught providing false information to U.S. News. But generally, the scandals have been brief. Why did Temple's grow?

The scandal broke in January 2018, when U.S. News announced that it was removing Temple's online M.B.A. program from its 2018 Best Online Programs list. Part of the formula used by U.S. News is based on standardized test scores, and score averages carry less weight when under 75 percent of new students submit scores. In the case of Temple's online M.B.A. program, the business school originally reported that all of its students submitted test scores. In fact, only 20 percent had done so.

After the U.S. News announcement, the website Poets & Quants, which focuses on business schools, started digging around in the data Temple had reported to U.S. News for the previous (No. 1) rankings.

It turned out that in the years 2014, 2015 and 2016 (the three years prior to the most recent for which Temple was ranked best online M.B.A. program), the university had also reported that 100 percent of its students had taken standardized admissions tests. In the two years prior to that (when Temple hadn't been the top program), the percentages were 25 and 33 percent.

As Poets and Quants wrote, it would seem highly unlikely that an M.B.A. program would have no more than a third of its students taking standardized tests for several years, and then jump to 100 percent for several years straight, and then drop down to 20 percent, the percentage Temple conceded was correct for the 2017 entering class.

Temple then hired the law firm Jones Day to conduct an investigation. In July 2018, it released a report, finding:

• For ranking years 2015 through 2018 (typically with data coming from the prior year's new students), Temple's reports that all admitted applicants had taken the GMAT were wrong. The actual number was "significantly lower" than the 100 percent figure given. U.S. News asks business schools to report both GMAT and Graduate Record Exam scores (as some business school applicants take the GRE). Temple just converted GRE scores (which were supposed to be provided with breakdowns on various parts of the exam) into GMAT scores and said that no applicants took the GRE. The Jones Day report indicated that, at one point, U.S. News raised questions about the 100 percent test-taking applicants, but the magazine did not pursue the issue when Temple provided more false information.
• For ranking years 2015 through 2018, undergraduate GPAs were "inflated through use of various methods." One of those methods was to take GPAs listed as a 1/100 value and improving them to the "next highest" 1/10 value. As an example, the Jones Day report said that this would mean reporting 3.22 as 3.3. U.S. News asked business schools to report mean GPAs, but Temple sometimes gave the mean and sometimes the median (using the inflated statistics either way).
• For ranking years 2017 and 2018, Temple underreported the number of admissions offers, implying that the program was more selective than was the case.
• For ranking years 2016 through 2018, Temple provided false information about debt. U.S. News asks business schools for the average debt among graduates who borrow. Temple reported instead the average for all graduates, thus lowering the average debt level.
• For ranking years 2016 through 2018, Temple counted both faculty members and "academic coaches" in a formula to determine student-faculty ratio.

Much of the blame in the report goes to an unidentified employee charged with preparing rankings material. That employee, the Jones Day report said, "knowingly misreported data" and "allegedly did so at the dean’s direction in the presence of another employee. The dean and the other employee deny that such direction was given."

The dean was M. Moshe Porat, who has since left the deanship and returned to his tenured professorship at the business school.

In 2018, he didn't respond to requests for an interview, and he has not responded to a request in regard to the Education Department findings.

But last year he sued Temple for $25 million for defamation. And Porat published an essay with his law firm defending his conduct.

In it, he denied ever ordering an employee to conceal false rankings data and said he reported the fraud when it was brought to him and "spent considerable time to fully restructure the oversight process for rankings." He also said that "Temple administrators absolutely knew that I did not knowingly provide false information to rankings agencies or to the University, nor did I falsify any data. I have come to learn that they recklessly disregarded internal emails and interviews in their possession directly contradicting their press releases and the false conclusions the university wanted the public to reach about me."