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Temple to pay $700K to settle U.S. Dept. of Education claims over business school rankings scandal

Temple University will pay $700,000 to settle the claims, the U.S. Department of Education announced.

Temple University's campus
Temple University's campusRead more / File Photograph

Temple University will pay $700,000 to the U.S. Department of Education to settle claims over its business school’s misreporting of data to U.S. News and World Report that falsely boosted its rankings, the department announced Friday.

The scandal rocked the North Philadelphia school in 2018, when it announced its business school had knowingly reported false data to the publication about its online MBA program and ousted its dean, who subsequently filed a lawsuit against Temple. Multiple investigations and lawsuits ensued.

Temple estimated its cost of cleaning up the scandal to be $17 million, including settlement payments and more than two years of remedial measures, including additional staffing, auditing, and other professional fees. But under the terms of the settlement, the university does not admit wrongdoing or liability, the department said.

“We know many students rely on rankings to make decisions, and in this case students were presented deliberately falsified information,” U.S. Education Secretary Betsy DeVos said in a statement. “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. … Fraud can happen anywhere, and fraud must be stopped everywhere.”

» READ MORE: Business dean forced out over falsified MBA data

The department looked at Temple’s submissions to U.S. News & World Report from 2014 to 2018 and alleged that the Fox School “knowingly and intentionally submitted false information to artificially inflate” its rankings for the online MBA and other programs. It also alleged the school “knowingly and intentionally republished the false rankings many 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 conduct, the department contended, increased the Fox School’s programs’ enrollment and revenue.

» READ MORE: Ousted dean fights back

Temple said in a statement that it was grateful to have reached a conclusion in the matter and noted all the changes the school has made, including establishing an internal verification unit, which oversees data submissions; making online and telephone hotlines available for whistle-blowers; hiring a third-party auditor for data submissions; and more training.

» READ MORE: Temple pays more than $5 million to settle claims

Also, as part of a separate settlement with the Pennsylvania Attorney General’s Office, the university agreed to award $250,000 in scholarships in the coming years to students who enroll in business school programs affected by the false data reporting. In addition, the school two years ago agreed to pay $4 million to settle a class-action lawsuit filed by former students of its online MBA program who claimed the school’s rankings scandal devalued their degrees. It also agreed to pay nearly $1.5 million to students in other Fox programs impacted.

Before the misrepresentations were discovered, the Fox Online MBA program had topped the U.S. News list for four straight years. When allegations of false data arose, Temple commissioned a study by an outside law firm that found the misreporting of data was done knowingly in some cases, and involved more than the online MBA program.