A university in Fremont found to have strikingly high numbers of foreign pupils has been hit with a warning from its accreditor for failing to place enough graduates in jobs. And a new report indicates Northwestern Polytechnic University saw a massive revenue drop in 2017, the year after an exposé called it an “upmarket visa mill.”
The non-profit business and technology school, which according to Pew Research had more than 11,000 foreign students and recent graduates with Optional Practical Training work permits between 2004 and 2016, brought in $10.7 million in revenue in 2017, a huge drop from the $72.8 million it reported the year before, according to the Center for Immigration Studies, a group advocating for reduced immigration. Center fellow David North said the data came from IRS filings obtained through a freedom of information request.
The revenue hit and subsequent warning paint a picture of a school in trouble, North said. “If the income of an organization drops by a margin of more than 80 percent in a year, one might expect a drop in the quality of its product, in this case the placement rates of its graduates,” North said.
Northwestern did not respond to a request for comment about its revenue or the warning from its accreditor.
Northwestern, which occupies two buildings in a business park, came under fire in 2016, when Buzzfeed News published the results of an investigation that alleged it was an “upmarket visa mill” that used “fake grades” to graduate foreign citizens into U.S. jobs. The school denied the claims, saying it provided a high-quality education. Last year, Republican U.S. Sen. Chuck Grassley, then chairman of the Judiciary Committee, sent a letter to the Department of Homeland Security saying “multiple credible reports” suggested Northwestern “operates a visa mill.”
At the center of the controversy over Northwestern is Optional Practical Training, a work permit for foreign university students and graduates that allows up to three years of employment. Critics of the school say that as the H-1B visa intended for highly specialized jobs has become harder to get, schools like Northwestern have turned to the OPT, providing low-quality education to foreign students wanting work permits, and cashing in on tuition. The OPT can also function as a path to an H-1B.
Students and recent graduates on the OPT are attractive to employers because they are not subject to the usual payroll taxes, North noted. “So what (Northwestern) does is to make a path for large numbers of lightly talented, lightly trained workers into the partially federally subsidized OPT program,” North said. “If you are an employer facing two people of apparently equal talent, and both available at the same salary, and you can get one 8.15 percent cheaper than the other, then the OPT candidate is likely to win out.”
In January, the Accrediting Council for Independent Colleges and Schools issued a letter to Northwestern saying the school’s 56 percent job placement rate for students in 2018 fell short of the 60 percent standard. The accreditor put Northwestern on a “compliance warning,” and ordered the school to complete an improvement plan and submit quarterly accountability reports this year. Failure to meet the requirements could lead to revocation of accreditation, the council said. The council did not respond to a request for comment.
The council’s most recent warning follows another it issued last year, when it warned Northwestern would lose accreditation if it didn’t produce information about student demographics, and satisfaction levels among students and employers who hire its students and graduates.
The accreditor has had its own troubles. In 2016, it was stripped of U.S. Department of Education recognition for “pervasive” compliance problems. The council, which accredited many for-profit schools, regained recognition under the administration of President Donald Trump.
Northwestern, which offers education in business and technology, is registered as a non-profit. It has built up significant financial holdings, with Buzzfeed reporting that in 2014, it held more than $77 million in assets, and had bought homes for members of its controlling family, including one for $1.5 million — more than it reported spending on total faculty and staff salaries in 2014, according to Buzzfeed.
Records obtained by the Center for Immigration Studies show that despite Northwestern’s revenue decline in 2017, it had total assets that year of $214 million, with $157 million in mutual funds, the center’s North said. As the school’s revenue plummeted, Northwestern cut costs to $7.6 million from $19.2 million in 2016, and was able to turn a profit of $3.1 million — although that was far below 2016’s $53.6 million profit, North said.