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#Inflategate? After losing its #1 U.S. News ranking, Temple's online MBA program faces many challenges

Jones Day law firm has been hired to investigate. A student has sued. After soaring to the top of U.S. News' rankings, Temple's online MBA program has admitted that it misstated its numbers.

Temple's Fox School of Business Dean Moshe Porat and online MBA program director Darin Kapanjie, right, toast the school's No. 1 ranking, which US News recently yanked due to data errors. (Credit: Temple)
Temple's Fox School of Business Dean Moshe Porat and online MBA program director Darin Kapanjie, right, toast the school's No. 1 ranking, which US News recently yanked due to data errors. (Credit: Temple)Read moreTemple

After scaling the heights, Temple's online MBA program has hit a low point: The school topped U.S. News' rankings for four straight years but then was completely dropped from the magazine's prestigious national rankings this year for misrepresenting its data.

A Temple MBA student is now suing the university, alleging that he and others were defrauded. And the Jones Day law firm has been hired to investigate what went wrong. The reversal threatens to tarnish the fast-growing online MBA program.

"Over the years, U.S. News has tossed out a few schools for misreporting data. But this is the most embarrassing case ever because Fox's online MBA was ranked at the very top for four straight years," said John A. Byrne, founder and editor of the website, which covers graduate business education. "Based on what we now know, it's highly unlikely that the school deserved any of those No. 1 rankings."

Temple's online MBA degree, which charges roughly $60,000 a student, is a moneymaker. With more than 300 students enrolled, that would generate about $18 million in revenue for Temple.

Executives with the school and the university said they would not comment until Jones Day's review of data reporting is released later this spring.

The student lawsuit was one wake-up call: Temple Fox School of Business MBA student Kyle Smith filed suit against Temple in February, alleging that the false data the business school submitted to U.S. News damaged him and other students. The suit alleges Temple made it to the No. 1 spot in U.S. News' rankings because the school manipulated test numbers – in particular, the number of students who submitted GRE or GMAT scores with their applications.

"Temple's No.1 Online MBA ranking provided significant leverage to enable the school to increase enrollment in its online MBA offering," Smith's lawsuit said. In 2017, Temple was able to increase its online MBA enrollment by more than 50 percent "to 546 students from 351, one of the largest percentage increases of any online MBA offering that year," the suit said, citing data from Smith is seeking $5 million in damages on behalf of the class action.

U.S. News penalizes online MBA programs if fewer than three-quarters of new entrants submit a GMAT or GRE score, because the lack of data makes it unlikely the standardized test scores are representative of the entire incoming class. Temple mistakenly said all 255 of the program's latest incoming class submitted GMAT scores to get into the program, with the average score being 619.

In fact, the school acknowledged that only 50 students, or 19.6 percent, submitted GMAT scores. As a result, Temple's online MBA program, which ranked first in the nation for four consecutive years, is now "unranked" by U.S. News.

Where would 19.6 percent have ranked Temple? Definitely not in first place, Byrne said. "Temple would have probably been either third or fourth in the U.S. News ranking if it had originally submitted the corrected test data," he said. "One unknown, however, is that average GMAT score. That was not corrected by Temple and for the sake of this analysis we used the GMAT score they originally submitted."

In 2013, the first year that U.S. News numerically ranked online programs, the online program at Temple Fox placed 28th. The school reported that it enrolled just 18 students for that survey and that 33 percent of them had taken the GMAT for an average score of 550.

Temple jumped into first place in U.S. News' online ranking in 2015 from ninth in 2014, when the school was in a tie with rival offerings from James Madison University and Quinnipiac University.

In the 2016 ranking, Fox claimed that 100 percent of 135 new students submitted GMAT scores, with the average at 600.

In the 2017 ranking, Fox asserted that 100 percent of 198 new students had taken the GMAT, with an average score of 582.

And in the recently published 2018 ranking, the school initially said that all 255 of the program's latest incoming class submitted GMAT scores to get into the program, with an average GMAT score of 619.

The university has since asked U.S. News to withdraw the school from its forthcoming rankings on full- and part-time MBA programs. Last year, Fox's full-time MBA program moved up nine places to rank 32nd.

It's still unclear how the error was discovered. Temple said it self-reported the mistake, but a source within the school said a whistle-blower pushed the university to disclose the bad data.

In an era of soaring tuitions, Temple's online MBA program is considered one of the best programs for the price and has generated headlines and revenue for the university. Temple heavily marketed its No. 1 ranking all over the Greater Philadelphia area in recent years.

The online MBA launched in fall 2009 under Darin Kapanjie, who came to Temple in 2003 as a faculty member in statistics.

Kapanjie was charged with integrating technology in the MBA classrooms and launching online courses. His title became academic director for the online and part-time MBA programs, and he won the admiration of the business school dean and top leadership at Temple, in part by pushing for the online MBA program to include a vault of video lectures, enabling students to do more online. In 2012, Kapanjie asked the dean to hire more expensive professional video producers to create classes with television-quality-style broadcasts, instead of just webcams. Kapanjie now oversees a department of about a dozen employees, according to Temple's website.

The university would not make Kapanjie or any official available for interviews, citing the ongoing Jones Day investigation.

The Fox School revamped its part-time program in 2015, Kapanjie told University Business magazine this year.

"The part-time program has seen 17 to 20 percent growth year over year because the programs now speak to that busy, working professional," Kapanjie told the magazine. Students can choose to divide their time between classrooms and synchronous WebEx sessions.

Once Kapanjie and his department helped win Temple's online MBA the No. 1 spot, that in turn helped the school draw more MBA students, more money, and gave Kapanjie more power and space at the university, a former employee said.

Students rated Kapanjie a top professor but also an easy one, according to the review website "Easier than middle school classes. He is laid back, and also quite funny," one student posted in January.

From two December 2017 reviews: "He always cuts his lectures short but covers everything more than enough within that time. Part of the class was online and it was super easy. Definitely an easy A."

"His hybrid class meets once a week (about 270 students), then you watch two videos and take a quiz on Thursdays. If you pay attention and participate in his class (poll everywhere), you'll pass with some sort of A grade. His exams aren't necessarily `easy,' but they're certainly not hard. Take Darin!" wrote another student reviewer.

Kapanjie has repeatedly tweeted the online program's No. 1 ranking, though he has been silent since the department was stricken.

Temple's Fox School of Business dean, Moshe Porat, also praised the No. 1 ranking, saying in an internal video that Temple was spending $1 million on "raising our profile on a continuous basis" in advertising its top ranking, on billboards, and other media. The school also created video campaigns to attract students from overseas and other parts of the country.

Pressure to move up in the rankings while keeping tuition competitive is intense.

"The state subsidy is continuously going down, so will this be reflected in the cost of tuition?" Porat said in the internal video, produced in 2015. Porat was also successful in landing large donations from bold-faced names such as Richard Fox, founder of the Fox Realty Cos., Safeguard Scientifics founder Warren "Pete" Musser, and the Alter family, whose patriarch founded Advanta Corp.

Porat taught risk management at Temple starting in 1979 and chaired that department from 1988 to 1996, when he became dean of Temple's business school. Until Porat took over, the school focused primarily on preparing Philadelphia-area undergraduates for careers at area companies, but now it attracts students from around the country.

Temple is undergoing an audit of its student data, said Steve Cordasco, a financial adviser, founder of Cordasco Financial Network, and a radio host who attended Temple's undergraduate business program. He is also a donor to the business school who says he talks regularly to the dean.

"They have to have formal processes in place going forward when applying for rankings," Cordasco said. "They're auditing internally to figure out if there was gaming or not. That was the problem — there may have been no checks and balances. The audit will determine that."

Some other MBA programs use Big Four auditor firms to check their rankings data, Cordasco added.

"They have good-quality faculty, education, brand and networks in the Mid-Atlantic region. It's a solid choice for people wanting to work in this area," said Eliot Ingram, CEO of Clear Admit, which advises business school applicants on the process. "So it's unfortunate that someone at Temple's MBA program failed to play by the rules of the U.S. News rankings."