After School

A college based in Lower Manhattan is in danger of losing its academic accreditation, making it the latest in series of local institutions facing similar headwinds. Alliance University (known as Nyack College until rebranding last year) has been based at Two Washington Street (near Battery Place) since 2018, after decamping from the Rockland County campus that had been its home since the 1890s.

In March, Alliance was notified that by the Middle States Commission on Higher Education (MSCHE) that it had been placed on “show cause” status, a heightened level of scrutiny under which a school must demonstrate that it has resolved alleged problems or else face revocation of its legal authority to offer for-credit courses and grant degrees. The MSCHE alleges that financial problems at Alliance cast doubt on its ability to continue operating. A hearing slated for June will make a further determination about the university’s accreditation.

This development follows a similar narrative at Kings College, located at 56 Broadway, which planted its flag in Lower Manhattan in 2012. After purchasing the former Riff Hotel on Washington Street for use as a dormitory (and renaming it DeVos Hall, after the family of donors that includes Trump Secretary of Education Betsy DeVos and Blackwater founder Erik Prince), the school began to teeter during the Covid pandemic. Last year, it put DeVos Hall up for sale, and compelled students to move to a block of apartments the college rented in Brooklyn. Earlier this year, those students began receiving eviction notices alleging that Kings College had failed to pay rent on their units. At the same time, MSCHE put Kings College on “show cause” status, citing “insufficient evidence that the institution is in compliance” with the Commission’s standards on “planning, resources, and institutional improvement.” This development followed an announcement by King’s College issued in January that it needed to raise $2.6 million to fund its “immediate needs” no later than February 15. By that deadline, donors had contributed less than ten percent of that amount. In March, administrators announced that the school was likely to close permanently at the end of the spring term.

And last year, New York State regulators forced the closure of the Olivet University’s Manhattan campus, which had been located at Six Barclay Street, citing “a well-established pattern of non-compliance with laws, rules, and regulations,” as well as a litany of financial problems, tax liens, and lawsuits, as well as a Department of Homeland Security probe into allegations of money laundering, human trafficking, and immigration fraud.

This followed a 2018 controversy surrounding Berkeley College, a for-profit institution founded in 1931 (and unrelated to the prestigious University of California school with a similar name), which had opened a campus at 130 William Street in 2004. The City’s Department of Consumer Affairs (DCA) sued the school, alleging that Berkeley College violated New York City consumer protection law and local debt collection rules, while engaging in predatory lending practices. In a two-year investigation, the DCA sent undercover agents into Berkley, posing as applicants, and gathered evidence that the school lured prospective students—many of whom were people of color and first-generation college students with low incomes—to one-on-one sales pitches, where they were given misleading presentations about the school’s academic reputation, and deceived about their own possible financial obligations and employment prospects after graduation.

Among other charges, the DCA alleged that Berkeley representatives hoodwinked students into taking out “institutional loans” (meaning loans made directly by Berkeley) that were deceptively referred to as “payment plans.” According to the DCA, Berkeley representatives blocked students from paying tuition in any other way (even refusing to let them pay tuition balances up front), instead steering them into a payment plan.

The investigation also turned up evidence that Berkeley College violated local debt-collection laws when attempting to recoup these loans. These violations appear to have taken several forms, including attempts to collect debts that were not owed, and concealing from students that it was Berkeley representatives who were calling for payment.

The DCA also alleged that Berkeley representatives told an undercover inspector that “96 percent of our students graduate and are employed once they graduate,” when the school’s actual graduation rate was 29 percent.

Berkeley College left Lower Manhattan when the building it occupied was sold and redeveloped, transferring its operations to Midtown. Last year, Berkeley reached a settlement in the 2018 City probe, in which it agreed to waive collections on $20 million in outstanding student debt, make restitution to some former students, and modify its debt-collection practices going forward. Berkeley remains accredited by the MSCHE.