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The recent denial of nonprofit status for Stevens-Henager College and its sister institutions stemmed from an agenda-driven smear campaign, according to the schools' owner.
In a letter dated Sunday, the Center for Excellence in Higher Education asked the U.S. Department of Education to reconsider its Aug. 11 decision that CEHE's chain of private career colleges operate as for-profit entities.
That decision, the letter states, was based on the bias and animus against private education critics, and was delivered via an ambush press release filled with "egregious, unsubstantiated charges."
"As a result," the letter states, "the media, CEHE employees, its bank, business associates, and colleagues learned about the Decision before CEHE's Chief Executive Officer."
CEHE is recognized by the IRS as a nonprofit organization, and took ownership of Stevens-Henager College, CollegeAmerica, California College San Diego and Independence University in 2012 after purchasing the school chain from the Carl Barney Living Trust.
Following that sale, CEHE filed change of ownership applications with the U.S. Department of Education and promoted its schools as nonprofit institutions.
But the department contends that school revenue continues to flow to Barney in the form of debt from the transfer of ownership and rent payments for school campuses, many of which occupy property owned by Barney's companies.
In a strongly worded statement, U.S. Education Secretary John King implied that CEHE was seeking nonprofit status in order to escape oversight and said to similar for-profit schools, "Don't waste your time."
Eric Juhlin, CEHE's chief executive officer, was critical of the department's reasoning, saying in a prepared statement that it would also disqualify King's alma mater, Stanford University, from nonprofit status.
"If making debt payments equals failing the definition of a nonprofit institution," Juhlin said, "then almost every nonprofit college in America will now fail the department's definition."
In an interview Tuesday with The Tribune, Juhlin added that King's characterization of CEHE's motives are unfounded and false.
"To imply that we are somehow trying to do this solely to avoid oversight or regulation is preposterous," he said.
For-profit colleges are limited in the amount of revenue they can collect in the form of federal financial aid, and are subject to other regulations.
Stevens-Henager College was established in Ogden in 1891 and currently operates six campuses in Utah, with other CEHE schools located throughout the Intermountain West and California.
A lawsuit against Stevens-Henager is pending in federal court, based on allegations that the school inappropriately received federal education funds, offered unlawful bonuses to campus recruiters and employed unqualified faculty.
Juhlin said that if nonprofit status is not granted, there are other avenues CEHE would consider pursing to challenge the department's decision, including litigation.
"That's certainly an opportunity that is available to us," he said.
Representatives for the U.S. Department of Education could not be reached for comment.
Twitter: @bjaminwood