Temple University will pay the U.S. Department of Education a $700,000 fine following the agency's investigation into its business school submitting false data for U.S. News & World Report's college rankings.
The department argued that the Fox School of Business and Management "knowingly and intentionally" gave incorrect information in an attempt to boost the reputation of its online MBA and other programs.
The university already reached a multimillion dollar settlement with students in the business school who sued after they felt they were misled.
So the publication made waves in January 2018 when it announced it removed Temple's online MBA from its rankings, saying the Fox School overstated the share of students who provided Graduate Management Admission Test scores. The school said all new entrants in a single year did, when only about 20% had.
The university at the time hired law firm Jones Day to investigate the scope of the misreporting. It found the business school had given false information about standardized test scores for several years, inflated the average grade point average of undergraduates and misrepresented the number of admissions offers.
Those findings led to the business school dean's ouster and a $5.5 million settlement with students who sued claiming they were misled about the program. Temple also arranged a deal with Pennsylvania's attorney general in 2019 to firm up its processes for gathering and submitting data, and it dedicated $250,000 for business school scholarships.
The Education Department wrote in the settlement deal released Friday that the business school "substantially misrepresented the nature" of its programs by advertising its false ranking, which "wrongly increased Temple's enrollment and revenue, deceived consumers, and unfairly harmed competitors."
The agency has never before punished an institution for misrepresentation on the rankings, said Beth Stein, a senior adviser at The Institute for College Access and Success and a former longtime Capitol Hill staffer. A $700,000 fine is not much of a deterrent on its own, Stein said, but she noted Temple has had to pay at least $17 million in remediation over the incident, according to the settlement document.
The department will hold Temple financially liable for borrower defense claims that emerge. If students feel their institution misled them, they can file a report with the department requesting their loans be forgiven. However, Stein said it's unlikely that many students would be eligible for borrower defense under a new department rule finalized in 2019.
Temple spokesperson Ray Betzner wrote in an email that the university was "grateful" to have reached an agreement with the department. Betzner highlighted the measures it has taken to prevent future misreporting, including a new unit charged with overseeing the data submission and a hotline for reporting malfescience.
The U.S. Department of Veterans Affairs also threatened this year to block Temple, and four other institutions, from enrolling students using GI Bill benefits, alleging they engaged in false or misleading advertising. The VA said in July the schools had taken corrective action.