Purdue University Global 550 West Van Buren Suite 700 Chicago, IL 60607

August 7, 2019

Dr. Betty Vandenbosch President UPS Tracking#: 1ZA879640297717368 Purdue University Global 550 West Van Buren Suite 700 Chicago, IL 60607

RE: Final Program Review Determination OPE ID: 00458600 PRCN: 201521128952

Dear President Vandenbosch:

The U.S. Department of Education's (Department's) Multi-Regional and Foreign Schools Participation Division (MRFSPD) issued a program review report on September 27, 2018 covering Purdue University Global's (Global's) administration of programs authorized by Title IV of the Higher Education Act of 1965, as amended, 20 U.S.C. §§ 1070 et seq. (Title IV, HEA programs), for the 2013-14 and 2014-15 award years. Global' s final response was received on February 28, 2019. A copy of the program review report (and related attachments) and Global's response are attached. Any supporting documentation submitted with the response is being retained by the Department and is available for inspection by Global upon request. Additionally, this Final Program Review Determination (FPRD), related attachments, and any supporting documentation may be subject to release under the Freedom oflnformation Act (FOIA) and can be provided to other oversight entities after this FPRD is issued.

Purpose:

Final determinations have been made concerning all of the outstanding findings of the program review report. The purpose of this letter is to: (1) identify liabilities resulting from the findings of this program review report, (2) provide instructions for payment of liabilities to the Department, and (3) notify the institution of its right to appeal.

The total liabilities due from the institution from this program review are $12,329,023.27. However, since Global has already returned $12,210,071.00 ofthis liability, the outstanding liability amount to be repaid is $118,952.27.

This final program review determination contains detailed information about the liability determination for all findings.

Federal Student Aid An OFFICE of the U.S. DEPAR T M ENT of EDUCATION Multi-Regional and Foreign School Participation Division Union Center Plaza, 830 First Street, NE, 7th Floor Washington, DC 20202 StudentAid.gov Purdue University Global OPE ID: 00458600 PRCN Number: 201521128952 Page 2 of 4

Protection of Personally Identifiable Information (PH):

PII is any information about an individual which can be used to distinguish or trace an individual's identity (some examples are name, social security number, date and place of birth). The loss of PII can result in substantial harm, embarrassment, and inconvenience to individuals and may lead to identity theft or other fraudulent use of the information. To protect PII, the findings in the attached report do not contain any student PII. Instead, each finding references students only by a student number created by Federal Student Aid. The student numbers were assigned in Appendix A, Student Sample. In addition, Appendices Dl-D2 also contain PII. These appendices were encrypted and sent separately to the institution via e-mail.

Appeal Procedures:

If Global elects to appeal to the Secretary of Education for a review of the financial liabilities established by this FPRD, the institution must file a written request for a hearing. Please note that institutions may appeal financial liabilities only. The Department must receive Global's request no later than 45 calendar days from the date Global receives this FPRD. The Department requests that Global submit an original and four copies of its complete request for review. The request must be sent to:

Attn: Susan Crim, Director Administrative Actions and Appeals Service Group U.S. Department of Education Federal Student Aid/Enforcement 830 First Street, NE UCP3, Room 84F2 Washington, DC 20002-8019

Global's appeal request must:

(1) indicate the findings, issues, and facts being disputed; (2) state the institution's position, together with pertinent facts and reasons supporting its position; and (3) include a copy of the FPRD received by the school.

When it submits its request for appeal, the institution may also include documentation it believes the Department should consider in support of the appeal. If such documentation is submitted, please provide one copy on an electronic format, preferably as a PDF, such as on a flash drive. Please provide the additional copies in hard copy format.

If any appeal documents include personally identifiable information (PII), the PII must be redacted, except for the student's name and last four digits of his/her social security number (please see the enclosed document, "Protection of Personally Identifiable Information," for instructions on how to mail records containing PII). Purdue University Global OPE ID: 00458600 PRCN Number: 201521128952 Page 3 of 4

If the institution's appeal is timely, the request for appeal will be transmitted to the Department's Office of Hearings and Appeals (OHA), for an administrative hearing in accordance with§ 487(b)(2) of the HEA, 20 U.S.C. § 1094(b)(2). The Hearing Official assigned to the case will issue an order scheduling the submission of briefs and supporting evidence in accordance with 34 C.F.R. § 668.l 14(c). The institution may therefore submit additional documentation supporting its appeal request at that time. Further, if the institution is appealing a projected liability amount, it may provide detailed liability information from a complete file review, either at the time it initially submits its appeal request or pursuant to the proceedings at OHA. The procedures followed with respect to Global's appeal are those provided at 34 C.F.R. Part 668, Subpart H. Interest on the appealed liabilities shall continue to accrue at the applicable value of funds rate, as established by the United States Department of Treasury, or if the liabilities are for refunds, at the interest rate set forth in the loan promissory note(s).

Record Retention:

Program records relating to the period covered by the program review must be retained until the later of: resolution of the loans, claims or expenditures questioned in the program review; or the end of the retention period otherwise applicable to the record under 34 C.F.R. §§ 668.24(e)(l), (e)(2), and (e)(3).

The Department expresses its appreciation for the courtesy and cooperation extended during the review. If the institution has any questions regarding this letter, please contact Shari Mecca at (646) 428-3757. Questions relating to any appeal of the FPRD should be directed to the address noted in the Appeal Procedures section of this letter.

Sincerely,

Michael Frola Division Director

Enclosure: Protection of Personally Identifiable Information Final Program Review Determination Report (and appendices) cc: Melissa Prichard, Executive Director of Financial Aid ([email protected]) Indiana Commission for Higher Education ([email protected]) Iowa Department of Education Iowa College Student Aid Commission ( [email protected]) Maine Department of Education ( [email protected]) Maryland Higher Education Commission ([email protected]) Missouri Department of Higher Education Nebraska Coordinating Commission for Postsecondary Education ([email protected]) Purdue University Global OPE ID: 00458600 PRCN Number: 201521128952 Page 4 of 4

Wisconsin Educational Approval Board ([email protected]) North Central Association of Colleges and Schools, The Higher Learning Commission ([email protected]) Department of Defense Department of Veterans Affairs Consumer Financial Protection Bureau PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION

Personally Identifiable Information (PII) being submitted to the Department must be protected. PII is any information about an individual which can be used to distinguish or trace an individual's identity (some examples are name, social security number, date and place of birth).

PII being submitted electronically must be encrypted. The data must be submitted in a .zip file encrypted with Advanced Encryption Standard (AES) encryption (256-bit is preferred). The Department uses WinZip, however, files created with other encryption software are also acceptable, provided that they are compatible with WinZip (Version 9.0) and are encrypted with AES encryption. Zipped files using Win Zip must be saved as Legacy compression (Zip 2.0 compatible).

The Department must receive an access password to view the encrypted information. The password must be e-mailed separately from the encrypted data. The password must be 12 characters in length and use three of the following: upper case letter, lower case letter, number, special character. A manifest must be included with the e-mail that lists the types of files being sent (a copy of the manifest must be retained by the sender).

Hard copy and electronic files containing PII must be:

 sent via a shipping method that can be tracked with signature required upon delivery  double packaged in packaging that is approved by the shipping agent (FedEx, DHL, UPS, USPS)  labeled with both the "To" and "From" addresses on both the inner and outer packages  identified by a manifest included in the inner package that lists the types of files in the shipment (a copy of the manifest must be retained by the sender).

PII data cannot be sent via fax.

Prepared for Purdue University Global

OPE ID 004586 PRCN 201521128952

Prepared by U.S. Department of Education Federal Student Aid School Participation Division - Multi-Regional and Foreign Schools

Final Program Review Determination August 7, 2019

830 First Street, NE, Washington, DC 20202 StudentAid.gov

Purdue University Global OPE ID: 004586 PRCN: 201521128952 Page 1

Table of Contents

A. Institutional Information ...... 2 B. Scope of Review ...... 5 C. Final Determinations ...... 6 Findings without Liabilities ...... 6 Finding 1: Lack of Administrative Capability ...... 6 Finding 2.B: Lack of Internal Controls Regarding Attendance Monitoring ...... 6 Finding 3: Improper Pell Awarding Based on Student’s Enrollment Status ...... 7 Finding 4: Untimely Reporting to the National Student Loan Data System (NSLDS) . 7 Finding 5: Failure to Resolve Conflicting Information ...... 8 Finding 6: Inadequate Recordkeeping ...... 8 Findings with Established Liabilities ...... 8 Finding 2.A: Determination of Last Date of Attendance ...... 8 Finding 2.C: Earned Grades Issued for Unofficial Withdrawals ...... 12 D. Summary of Liabilities ...... 13 E. Payment Instructions ...... 14 F. Appendices ...... 15 Appendix A – Program Review Student Sample Appendix B – Program Review Report Dated September 27, 2018 Appendix C1 – Purdue Global Program Review Response Dated November 27, 2018 Appendix C2 – Purdue Global Program Review Response Dated January 25, 2019 Appendix C3 – Purdue Global Program Review Response Dated February 12, 2019 Appendix C4 – Purdue Global Program Review Response Dated February 27, 2019 Appendix C5 – Purdue Global Program Review Response Dated February 28, 2019 Appendix C6 – Return of Title IV Reconstruction Dated June 29, 2018 Appendix D1 – Cost of Funds Worksheet – Purdue University Global – Finding 2.A. Appendix D2 – Cost of Funds Worksheet – Purdue University Global – Finding 2.C.

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A. Institutional Information

Main Campus Purdue University Global1 9000 Keystone Crossing, Suite 120 Indianapolis, IN 46240 OPE ID 00458600

Additional Locations (as of March 22, 2019) 2165 Edgewood Parkway 4655 North West 121 Street Cedar Rapids, IA 52404-2998 Urbandale, IA 50323-5702 OPE ID 00458604 OPE ID 00458605

Plaza West 7009 Nordic Drive 2570 4th Street SW Cedar Falls, IA 50613-6309 Mason City, IA 50401-4665 OPE ID 00458607 OPE ID 00458606

5425 North 103rd Street 1821 K Street Omaha, NE 68134-1002 Lincoln, NE 68508-2668 OPE ID 00458608 OPE ID 00458609

18618 Crestwood Drive 18642 Crestwood Drive Hagerstown, MD 21742-2797 Hagerstown, MD 21742-2797 OPE ID 00458612 OPE ID 00458613 Disapproval June 8, 2017

265 Western Avenue 475 Lisbon Street South Portland, ME 04106-2415 Lewiston, ME 04240 OPE ID 00458615 OPE ID 00458616 Closed November 17, 2017

14 Marketplace Drive 9000 Keystone Crossing Augusta, ME 04330-8038 Suite 120 OPE ID 00458617 Indianapolis, IN 46240 OPE ID 004586182

1 Kaplan University was sold to Purdue University Global, Inc. an Indiana Public Benefit Corporation controlled by Purdue University on March 22, 2018. 2 Location in Indianapolis was redesignated as the main location in September 2018.

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201 W. Wisconsin Avenue 1807 Park 270 Drive Suite 105 Milwaukee, WI 53203 St. Louis, MO 63146 OPE ID 00458619 OPE ID 00458620

1801 East Kimberly Road Davenport, IA 52807-2095 OPE ID 004586213

Also included in the Main Campus OPE ID Purdue University Global Online

Concord Law School 10866 Wilshire Boulevard Suite 1200 Los Angeles, CA 90024

Learning Center (included in the Main Campus OPE ID)

1390 Picard Drive Suite 100 Rockville, MD 20850

Corporate Offices 550 West Van Buren 1525 Cypress Creek Road Chicago, IL 60607 Fort Lauderdale, FL 33309-3861

1015 Windward Ridge Parkway Alpharetta, GA 30005-2231

Type: State Controlled Institution4

Highest Level of Offering: Master’s/Doctor’s Degrees

Accrediting Agency: North Central Association of Colleges and Schools, the Higher Learning Commission

Current Student Enrollment (per school as of January 29, 2015): 42,215

% of Students Receiving Title IV (per school as of January 29, 2015): 84.7%

3 Location in Davenport, IA was redesignated as an additional location in September 2018. 4 Kaplan University was sold to Purdue University Global, Inc. an Indiana Public Benefit Corporation controlled by Purdue University on March 22, 2018 and is now considered a state-controlled institution. At the time of the review, the school was for-profit/proprietary.

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Title IV Participation (from PC Net as of April 2, 2018):

2016-17 AY 2015-16 AY Federal Pell Grant Program (Pell) $ 93,744,131.00 $116,324,230.00 William D. Ford Federal Direct Loan Program (Direct Loan) $436,885,500.00 $529,902,849.00 Federal Supplemental Educational Opportunity Grant (FSEOG) $ 5,313,945.00 $ 4,944,106.00 Federal Work Study (FWS) $ 462,337.00 $ 755,689.00

Total Title IV Funding: $536,405,913.00 $651,946,874.00

2014-15 AY 2013-14 AY Federal Pell Grant Program (Pell) $140,054,206.00 $146,180,919.00 William D. Ford Federal Direct Loan Program (Direct Loan) $640,360,039.00 $633,797,208.00 Federal Supplemental Educational Opportunity Grant (FSEOG) $ 5,150,399.00 $ 5,272,372.00 Federal Work Study (FWS) $ 1,041,419.00 $ 988,278.00

Total Title IV Funding: $786,606,063.00 $786,238,777.00

3- Year Default Rate Direct Loan: 2015: 13.7% 2014: 14.6% 2013: 12.4% 2012: 12.9%

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B. Scope of Review

The U.S. Department of Education (Department) conducted a program review at Purdue University Global (Global) from February 23, 2015 through February 26, 2015. The review was conducted by Ms. Shari Mecca, Ms. Michelle Allred, Ms. Jane Eldred, and Mr. Eric Miles.

The focus of the review was to determine Global’s compliance with the statutes and federal regulations as they pertain to the institution's administration of Title IV programs. The review consisted of, but was not limited to, an examination of Global’s policies and procedures regarding institutional and student eligibility, individual student financial aid and academic files, attendance records, student account ledgers, and fiscal records.

The Department identified a sample of 15 files for review from the 2013-14 and 2014-15 (through February 26, 2015) award years. The Department randomly selected the files from a statistical sample of the total population receiving Title IV, HEA program funds for each award year. The Department also selected 50 files of the total population of students who earned a grade of “W” or “F”. The Department also selected 20 files from the spreadsheet whose enrollment was coded as never enrolled or “X” on the recipient data spreadsheet. Appendix A lists the names and social security numbers of the students whose files were examined during the program review.

The Department issued its Program Review Report (PRR) on September 27, 2018, included in Appendix B. Global submitted its first written response to the PRR for Findings 1, 2, 3, 5, and 6 on November 27, 2018 (November 27, 2018 Response), included in Appendix C1. Global had requested an extension for Finding 4 until January 27, 2019. Global submitted the subsequent response for Finding 4 on January 25, 2019 (January 25, 2019 Response), included in Appendix C2. A revised spreadsheet for Finding 2.A was submitted on February 27, 2019 but there was an issue with the password to open the file. The final spreadsheet was submitted on February 28, 2019. In addition, the file review for Finding 2.C. was previously submitted on June 29, 2018. Global’s responses included supporting documentation and are considered complete.

Disclaimer:

Although the review was thorough, it cannot be assumed to be all-inclusive. The absence of statements in the report concerning Global’s specific practices and procedures must not be construed as acceptance, approval, or endorsement of those specific practices and procedures. Furthermore, it does not relieve Global of its obligation to comply with all of the statutory or regulatory provisions governing the Title IV, HEA programs.

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C. Final Determinations

Findings without Liabilities

Finding 1: Lack of Administrative Capability In the November 27, 2018 response, Global stated that it respectfully disagreed with the finding of Lack of Administrative Capability. Although Global agreed that the issue in Finding 2.C. resulted in a failure to complete Return to Title IV (R2T4) calculations for certain students, Global stated that the finding was not suggestive of an overall or current lack of capability. See Finding 2.C. under Findings with Established Liabilities for more detail on the finding.

Although Global disagreed with the Department’s assessment that it lacked administrative capability, Global did agree with the Department’s statement in the “Required Actions” that it is essential that staff handling day-to-day financial aid processing are “cognizant of policies and procedures and are trained on changes in Title IV regulation.” Global provided details about its comprehensive training and internal controls that are in place to ensure that the financial aid staff is proficient in applicable Title IV regulatory requirements.

Global’s primary aspects of the financial aid professional onboarding and ongoing staff training and education include:

 Hiring qualified and experienced staff;  Comprehensive and continuous training for financial aid professionals;  Access to up to date educational training documents;  Quality assurance review processes to monitor new employees;  Specific required performance standards for all employees;  Regulatory and operational updates; and  Maintaining additional aid processing controls.

Although the Department concurs that Global and its predecessor, Kaplan, worked in close consultation with the Department to correct the inaccurate policy interpretation as it relates to Finding 2.C., the combination of the refund issues identified during the program review and self-identified by Global and its predecessor, Kaplan, represent a lack of administrative capability as well as a lack of fiduciary responsibility during the time periods in question as over $12 million was required to be repaid to the Department.

Global provided the details of its training plan. Therefore, Finding 1 is resolved.

Finding 2.B: Lack of Internal Controls Regarding Attendance Monitoring

Global provided updates to the attendance policy in the November 27, 2018 response to Finding 2.A. The Department’s required action also asked Global to respond to Student

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30. Global’s response to Student 30 adequately addresses the concerns identified. Global also provided a response to the other students identified in the finding. The Department notes that there was an error in the issues identified for Student 79, therefore, Global can consider that concern removed from the finding. Therefore, Finding 2.B. is resolved.

Finding 3: Improper Pell Awarding Based on Student’s Enrollment Status Global provided assurances in its November 27, 2018 response, that Pell Grant awards are based on the student’s actual enrollment status and that adjustments are made in a timely manner. As this was an isolated error, Global provided appropriate coaching and feedback to the employee that made the error. Global also provided a copy of its policy/procedure documentation. Therefore, Finding 3 is resolved.

Finding 4: Untimely Reporting to the National Student Loan Data System (NSLDS) In its January 25, 2019 response, Global stated that the Department did not take into consideration the Kaplan Commitment period when determining late submissions to NSLDS. The Kaplan Commitment (now the Purdue Global Commitment) is a trial period that is 3-weeks in length in which students are not admitted to the institution and can cancel enrollment without any financial obligation or impact to their transcript. These students are not admitted as a regular student until after the 3-week trial period, therefore are not reported to NSLDS until they have reached the end of the trial period and have been accepted as a regular student. Global also stated that scheduled breaks were not taken into consideration.

Global also stated that in 2015 it entered into a contract with the National Student Clearinghouse, thus implementing a consistent and regular process to report student enrollment and status change data files on a monthly basis. Global also stated that its internal audit team performs specified quality assurance testing on a quarterly basis.

Global updated its enrollment reporting process in early 2015 based on issues identified prior to the Program Review. Global contracts with the National Student Clearinghouse to transmit student enrollment and status change data files on a monthly basis. Because of the nature of Global’s calendar structure, data files are transmitted more frequently than those of a traditional institution, with an average of 29.5 days between file submissions.

Although Global uses the National Student Clearinghouse, Global is still responsible for ensuring that enrollment updates are submitted to NSLDS in a timely manner. If the National Student Clearinghouse receives it timely but does not report on Global’s behalf to NSLDS timely, it still reflects as Global being out of compliance.

The Department also asked Global to perform a file review because the Recipient Data Spreadsheet that Global provided to the Department revealed many students that were reported to NSLDS as never attended. The Recipient Data Spreadsheet is a list of students that had received Title IV aid. Global performed the required file review and

Purdue University Global OPE ID: 004586 PRCN: 201521128952 Page 8 confirmed that a subset of students was accurately reported as never attended due to cancellation of enrollment at the school, although some of these were not reported timely. Global confirmed that there was no harm to any students due to the late reporting.

The Department reviewed Global’s detailed response. Global also provided a copy of its policy/procedure documentation. Therefore, Finding 4 is resolved.

Finding 5: Failure to Resolve Conflicting Information In its November 27, 2018 response, Global stated that it did not agree with Finding 5 because the student was awarded the Kaplan University 75th Anniversary Grant and the grant application explains the terms and conditions of the grant. Global explained that it was university policy that students that are awarded an internal grant or scholarship may not combine such awards with any other university tuition reductions including Active- Duty Military and Veterans military tuition rates. Global repackaged the student at the conclusion of the 1405B term as the student’s grade point average dropped below the minimum requirement of 2.5. In addition, Global stated that the student would not have been eligible for the Veteran Spouse Discount because the student ceased attendance on April 26, 2015 and Global did not begin offering the discount until September 26, 2015. Global also stated in its response that since the introduction of military discounts, Global has maintained a process for determining student eligibility and applying military discounts. Global provided supporting documentation for this finding. Therefore, Finding 5 is resolved.

Finding 6: Inadequate Recordkeeping In its November 27, 2018 response, Global stated that it did not agree that the credit balance was coded incorrectly as stated in Finding 6. Global stated that its Credit Balance Standard Operating Procedure, which had been shared with the Department during the review, states that Global staff must schedule the credit balance in the following order: Parent PLUS Loans, Unsubsidized Loans, Subsidized Loans, and Grants (if applicable). As Global considers a Pell Grant as the first source of aid packaged and awarded to students, Global’s policy is to apply Pell Grants to the student’s charges prior to other grants and loans, regardless of the order in which the funds are received. As such, it is Global’s practice to encourage students to use the excess funds to reduce the loan indebtedness. Global provided supporting documentation for this finding. Therefore, Finding 6 is resolved.

Findings with Established Liabilities

Finding 2.A: Determination of Last Date of Attendance

Summary of Noncompliance: A student who ceases attendance at an institution that is required to take attendance, including a student who does not return from an approved leave of absence, or a student who takes a leave of absence that does not meet the requirements of 34 C.F.R. § 668.22(d), the withdrawal date is the last date of academic

Purdue University Global OPE ID: 004586 PRCN: 201521128952 Page 9 attendance as determined by the institution from its attendance records. See 34 C.F.R. § 668.22(b)(1)

An institution must document a student’s withdrawal date determined in accordance with 34 C.F.R. § 668.22(b)(1) and maintain the documentation as of the date of the institution’s determination that the student withdrew as defined in 34 C.F.R. § 668.22(l)(3). See 34 C.F.R. § 668.22(b)(2)

An institution is required to take attendance if an outside entity has a requirement that the institution take attendance, the institution itself has a requirement that its instructors take attendance, or the institution or an outside entity has a requirement that can only be met by taking attendance or a comparable process, including, but not limited to, requiring that students in a program demonstrate attendance in the classes of that program, or a portion of that program. If, in accordance with 34 C.F.R. § 668.22(b)(3)(i), an institution is required to take attendance or requires that attendance be taken for only some students, the institution must use its attendance records to determine a withdrawal date in accordance with 34 C.F.R. § 668.22(b)(1) for those students. See 34 C.F.R. § 668.22(b)(3)(i), (ii), (iii)

If an institution monitors whether its online students log into classes, is this an institution that is required to take attendance? No. The monitoring of whether online students log into classes does not by itself result in an institution being an institution that is required to take attendance for Title IV, HEA program purposes. If, however, the monitoring of student activity is tracking academic engagement, then the institution would be an institution that is required to take attendance for Title IV, HEA program purposes. See Dear Colleague Letter (DCL) GEN 11-14, Question and Answer 16

Attendance is defined on page 46 of Global’s 2013-14 catalog as:

“Regular participation in your courses is essential to your academic success.

At the campus locations, attendance is defined as attendance at a scheduled course meeting. Requirements for your attendance and participation are defined in each course's syllabus. If you are not in attendance for at least 50 percent of any scheduled class, you will be considered absent from that class. If you arrive late for a class or leave early, you will be considered tardy. Continued, excessive tardiness or absences in any class could lead to disciplinary action up to and including expulsion from that class.

You must register attendance in online coursework by posting to a discussion board, virtual office, or drop box, attending a seminar, or participating in a quiz or other classroom activity.

If you have not participated in any class for 21 consecutive calendar days (excluding scheduled breaks), you will be administratively withdrawn from your

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program. You may not exceed 14 days of nonattendance if you are enrolled in a 6- week term.

Courses are presented in weekly units, which begin on Wednesdays at 12:00 am ET and end on Tuesdays at 11:59 pm ET.

If you fail to log into any individual class within the first 21 days of the term, you will be dropped from the class or classes.

If you are a first-term or returning student and do not register attendance within the first 14 days of the term (7 days online), your enrollment will be cancelled.

If you are withdrawn due to nonattendance and wish to return, you must apply for readmission and may not return sooner than the beginning of the next grading period.”

Page 28 of Global’s 2014-15 catalog (rev. November 12, 2014) defines attendance as:

“Attendance is defined as attendance at a scheduled on-campus course meeting or, in an online course, posting to a discussion board, virtual office, or drop box, attending a seminar, or participating in a quiz or other classroom activity.

You are encouraged to attend class every day and to be on time. It is your responsibility to learn the material covered while absent and to see that you make up missed work in compliance with Kaplan University's guidelines. Hours of makeup work cannot be accepted as hours of class attendance, and makeup work is not permitted for the purpose of receiving veterans' educational training benefits.”

Withdrawal due to nonattendance is defined on page 29 of Global’s 2014-15 catalog, as:

“Attendance has important effects on your enrollment status at the University:

• If you have not participated in any class for 21 consecutive calendar days (excluding scheduled breaks), you will be administratively withdrawn from your program. You may not exceed 14 days of nonattendance if you are enrolled in a 6-week term.

• If you fail to log attendance in any individual class within the first 21 days of the term, you will be dropped from the class or classes.

• If you are a first-term or returning student and do not register attendance within the first 7 days, your enrollment will be cancelled.

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• If you are withdrawn due to nonattendance, grades of “W” will be posted for your courses, except when the period of nonattendance occurs in the final 28 days of a term (21 days in 6-week terms) when “F” grades will be posted.”

According to discussions with Global staff and documentation in student files, Global begins attendance outreach calls, emails, and text messages to students after approximately five days of non-attendance. Although the date of determination as entered in the enrollment screen in CampusVue appears to be the 14th day after nonattendance began, Global’s attendance policies state the that the administrative withdrawal does not occur until the 21st day of non-attendance. The Department found students that had a date of determination as 14 days after the last date of attendance, yet other system notes show that the student was not auto-dropped until a later date, which was also after the 21 days as stated in Global’s attendance policy. The 14th day is also used in the return calculations as the official drop date.

Although Global stated during the onsite portion of the review that they are a nonattendance taking institution, the Department disagrees with this interpretation based on the fact that Global does record attendance for the students in online classes and also tracks the online activity that the student attended or performed. This information is then entered into the CampusVue system, which is used to determine a student’s last date of attendance. The date of determination in CampusVue, as well as the drop date in the return calculations, both reflect the 14th day. Therefore, Global should be using 14 days of non-attendance to determine a student’s unofficial withdrawal date in their policies.

The PRR cited students 2, 10, 31, 47, 63, and 79 in which there were discrepancies in their attendance records which called into question the students documented last date of attendance. In addition, the PRR cited that students 33, 36, 39, 42, 44, 48, 50, 51, 52, 55, 61, 62, 66, 69, 70, 76, 77, 78, and 80 had gaps of greater than 14 days in their attendance history

Directives from PRR: Global was required to provide responses to students 2, 10, 31, 47, 63, and 79. Global was also required to review each student listed above and use the appropriate 14 days of non-attendance to determine if the student should have been unofficially withdrawn at an earlier point of time and provide a detail response in writing with the response to this PRR. Lastly, Global was required to perform a full-file review of students that had all non-passing grades in a term from July 1, 2013 to June 30, 2016 to ensure that the proper last date of attendance was used in any R2T4 calculation. This includes verifying that any last date of attendance activity was not triggered by an action of a Global employee and was actually performed by the student.

Analysis of Liability Determination: Global’s November 27, 2018 response stated that it had consistently maintained that it is an attendance taking institution. The attendance policy states that if a student has not participated in any class for 21 consecutive calendar days (excluding scheduled breaks), the student will be administratively withdrawn.

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While the system automatically withdraws the student on the 22nd day, the date of determination is recorded as 14 days after the student’s last date of attendance as required in regulation. Global adequately responded to the students identified in the PRR. Global has enhanced its policies and procedures and implemented additional internal controls over its unofficial withdrawal policy and determination of last date of attendance.

Global performed the required file review and noted that the last date of attendance was accurate for all students but found 151 students that had non-passing grades within a term where an R2T4 was required but was either not completed or completed but the return of required funds had not occurred.

Global stated that they were unable to provide the requested IP addresses as part of the file review due to the use of a load balancer which was used when students logged into Global’s portal to ensure user traffic is evenly distributed between multiple portal web servers to maintain efficient and secure web traffic. The use of the load balancer resulted in Global recording the IP address of the load balancer rather than the student’s actual IP address. As the IP address alone does not validate an individual’s identity, Global documented in the spreadsheet the last known academically related activity in which the student participated. Global detailed the internal controls that it has in place to ensure student access is limited to the enrolled students and only employees with necessary permissions have access to student accounts. In addition, Global has a detective control, which is based on a report generated directly from the learning management system which captures information regarding the employees that have access to the learning management system. This report is compared to any attendance related activity that was completed by an employee while assisting a student.

As a result of the file review, Global returned $278,857.00 in November 2018 to the Department for the 151 students identified in the file review. The associated cost of funds (COF) on the amount returned is $9,291.49, which will be assessed as a liability. The Department’s COF calculation for this finding can be found in Appendix D1.

Finding 2.C: Earned Grades Issued for Unofficial Withdrawals

Summary of Noncompliance: In February 2018, Global contacted the Department to discuss a potential issue regarding students that had earned a grade but had also a last date of attendance that was not consistent with completing the class. Historically, Global had used evidence of the last date of academic activity as the last date of attendance for R2T4 calculations but a procedural change occurred in 2016 where the last date of attendance was not reviewed for accuracy when a student earned a grade. Upon further review and research by Global, Global discovered that earned grades were being improperly granted when a student had unofficially withdrawn from courses but had

Purdue University Global OPE ID: 004586 PRCN: 201521128952 Page 13 completed some course work.5 This resulted in R2T4 calculations not being completed for students that had unofficially withdrawn.

Directives from PRR: Global performed a full file review of students that had earned a grade but had unofficially withdrawn prior to earning all of the Title IV, HEA funds that were disbursed from mid-2016 to early 2018. Global’s file review consisted of analyzing the last date of attendance documentation for 6,030 students. The spreadsheet, including the results of the file reconstruction, was provided to the Department on June 29, 2018. The file review resulted in over $11 million being returned to the Department.

Analysis of Liability Determination: Global’s November 27, 2018 response indicates that it had implemented additional controls to ensure future compliance related to policy changes for unofficial withdrawals. Global provided as part of its written response, job aids and training materials on the withdrawal (both official and unofficial) and R2T4 processes.

As a result of self-identifying the issue, Global returned $11,391,537.00 to the Department for the students identified in the file review on various dates between November 2017 and June 2018. The COF associated with the amount returned is $109,660.78, which will be assessed as a liability. The Department’s COF calculation for this finding can be found in Appendix D2.

D. Summary of Liabilities

The total amount calculated as liabilities from the findings in the program review determination is as follows.

Pell FSEOG DL Total Liabilities (Closed Award Year) Finding 2.A. $ 21,655.00 $ 1,718.00 $ 255,484.00 Finding 2.C. $734,261.00 $60,900.00 $11,136,053.00 Subtotal 1 $755,916.00 $62,618.00 $11,391,537.00 $12,210,071.00

COF $ 7,248.53 $ 371.74 $ 111,332.00 $ 118,952.27

TOTAL $763,164.53 $62,989.74 $11,502,869.00

Payable To: Totals Department $763,164.53 $62,989.74 $11,502,869.00 $12,329,023.27*

5 Global’s policies relating to withdrawals and earning a grade in a class conflicted which caused students that unofficially withdrew from a class to receive a grade as opposed to the “W” that should be used for withdrawals. There was no indication that this was a result of fraudulent activity.

Purdue University Global OPE ID: 004586 PRCN: 201521128952 Page 14

*Total liabilities are $12,329,023.27, but total amount to be repaid is $118,952.27 in COF as Global has repaid the principal amounts.

E. Payment Instructions

Liabilities Owed to the Department $100,000 or More

Global owes to the Department $118,952.27. This liability must be paid using an electronic transfer of funds through the Treasury Financial Communications System, which is known as FEDWIRE. Global must make this transfer within 45 days of the date of this letter. This repayment through FEDWIRE is made via the Federal Reserve Bank in New York. If Global’s bank does not maintain an account at the Federal Reserve Bank, it must use the services of a correspondent bank when making the payments through FEDWIRE.

Any liability of $100,000 or more identified through a program review must be repaid to the Department via FEDWIRE. The Department is unable to accept any other method of payment in satisfaction of these liabilities.

Payment and/or adjustments made via G5 will not be accepted as payment of this liability.

Instructions for completing the electronic fund transfer message format are included on the attached FEDWIRE form.

Terms of Payment

As a result of this final determination, the Department has created a receivable for this liability and payment must be received by the Department within 45 days of the date of this letter. If payment is not received within the 45-day period, interest will accrue in monthly increments from the date of this determination, on the amounts owed to the Department, at the current value of funds rate in effect as established by the Treasury Department, until the date of receipt of the payment. Global is also responsible for repaying any interest that accrues. If you have any questions regarding interest accruals or payment credits, contact the Department’s Accounts Receivables & Bank Management Group at (202) 245-8080 and ask to speak to Global’s account representative.

If full payment cannot be made within 45 days of the date of this letter, contact the Centralized Receivables Service (CRS) at 1-855-549-2683 to apply for a payment plan. Interest charges and other conditions apply.

If within 45 days of the date of this letter, Global has neither made payment in accordance with these instructions nor entered into an arrangement to repay the liability under terms satisfactory to the Department, the Department intends to collect the amount

Purdue University Global OPE ID: 004586 PRCN: 201521128952 Page 15 due and payable by administrative offset against payments due Global from the Federal Government. Global may object to the collection by offset only by challenging the existence or amount of the debt. To challenge the debt, Global must timely appeal this determination under the procedures described in the "Appeal Procedures" section of the cover letter. The Department will use those procedures to consider any objection to offset. No separate appeal opportunity will be provided. If a timely appeal is filed, the Department will defer offset until completion of the appeal, unless the Department determines that offset is necessary as provided at 34 C.F.R. § 30.28. This debt may also be referred to the Department of the Treasury for further action as authorized by the Debt Collection Improvement Act of 1996.

Breakdown of COF Liabilities by Title IV Program:

William D. Ford Federal Direct Loan (Direct Loan) Liabilities

Global must pay $111,332.00 in Direct Loan COF liabilities. The liabilities will be applied to the general Direct Loan fund.

Title IV Grant Liabilities

Global must pay $7,620.27 in Title IV Grant COF liabilities. The liabilities will be applied to the general Pell Grant and FSEOG funds.

F. Appendices

Appendices A, D1, and D2 contain personally identifiable information. All appendices will be emailed to Global as an encrypted WinZip file using Advanced Encryption Standard, 256-bit. The password needed to open the encrypted WinZip file will be sent in a separate email.

DEPARTMENT OF EDUCATION FED-WIRE EFT MESSAGE FORMAT & INSTRUCTIONS

ABA Number Type/Sub-Type 021030004

Sender No.: Sender Ref. No. Amount



Sender Name (Automatically inserted by the Federal Reserve Bank) ______Treasury Department Name/CTR/ TREAS NYC / CTR / ______BNF=ED / AC - 91020001 OBI= ______Name / City / State: ______DUNS / TIN: ______FOR: ______INSTRUCTIONS A. Complete circled items 1-4 above as follows:  Indicate amount including cents digits.  Indicate Name, City, and State.  Indicate DUNS Number and Taxpayer Identification Number (TIN).  Enter the reason for the remittance: Name of Institution, OPE ID Number, LOC Number (include any amendments) and LOC Amount.

Version: November 14, 2012