Online MBA Rankings Scandal Costs Temple $17 Million; After Ranking #1 In 2015-2018 With False Data, Business School Now Ranks #88

Following up on my previous posts (links below): Poets & Quants, MBA Ranking Scandal Costs Temple At Least $17 Million:

Temple University’s Fox School of Business says that the rankings scandal over its online MBA program has cost it a minimum of $17 million in “remediation costs.” The school made the disclosure in a settlement with the U.S. Department of Education over the school’s misreporting of data to U.S. News & World Report.

Temple’s fraudulent reporting of that data led U.S. News to rank its online MBA program first in the nation for four consecutive years in 2015, 2016, 2017, and 2018.

Under the settlement, announced yesterday (Dec. 4), Temple agreed to pay a $700,000 civil fine to the government. The payment is in addition to an earlier $4 million settlement of a class-action lawsuit filed by former online MBA students who claimed the school’s rankings scandal devalued their degrees, nearly $1.5 million to students in other Fox programs impacted and an agreement with the Pennsylvania Attorney General’s Office to award $250,000 in scholarships to students who enroll in business school programs affected by the false data reporting.

The Fox School of Business, which was tossed off the U.S. News ranking last year managed a return to the list of the best earlier this year. But instead of ranking first, Fox managed to do no better than 88th place this year, tied with six other business schools (see U.S. News 2020 Online MBA Ranking: Some Familiar Names & A Few Surprises).

Temple’s estimate of the cost of cleaning up the scandal includes the fees to law firms as well as additional costs resulting from additional staffing, auditing, and other professional fees. While the school’s settlement with the Department of Education does not admit wrongdoing or liability, it is beyond dispute that the school’s officials had fraudulently supplied data to U.S. News that misrepresented the health and quality of its online MBA program.

Indeed, the settlement clearly states that the Fox School of Business “knowingly and intentionally submitted false information to artificially inflate” its rankings for the online MBA and other programs. It also noted that 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 Department believes this advertising wrongly increased Temple’s enrollment and revenue, deceived consumers, and unfairly harmed competitors.”

• Inside Higher Ed
• Philadelphia Inquirer
• Philly Voice
• Temple News
• Wall Street Journal

Prior TaxProf Blog coverage:

• Rankings Scandal Unfolds At Temple Business School (Jan. 29, 2018)
• Temple Business School Dean Fired For Knowingly Submitting False Data To Inflate U.S. News Ranking Over Several Years (July 10, 2018)
• After Temple Admitted That Its Business School Misreported Data To Goose Its Ranking, U.S. News Demands Certification Of Other Schools' Data (Including Law School) (July 12, 2018)
• Temple’s Ranking Scandal Spreads To Six Additional Programs; University Also Admits To Three Errors In The Data It Submitted For Its Undergraduate College Ranking (July 30, 2018)
• WSJ: Temple Rankings Scandal Spotlights MBA Grads’ Swelling Debt (Sept. 7, 2018)
• Temple Reaches $5.5 Million Settlement In U.S. News Rankings Scandal (Dec. 24, 2018)
• Federal Judge Approves $5.5 Million Settlement In Temple U.S. News Rankings Scandal (Jan. 31, 2019)
• Ousted Business School Dean Files $25 Million Defamation Lawsuit Against Temple For Unfairly Blaming Him In U.S. News Rankings Scandal (May 6, 2019)