State Representatives push for study of for-profit grad schools

Two failed lawsuits against Capella University and one of its instructors have prompted a bill, discussed at yesterday's House higher ed committee meeting, that would have the state Office of Higher Education scrutinize the practices and contractual arrangements that for-profit graduate schools in Minnesota have with their students.

The bill is authored by a committee outsider, Rep. Peggy Scott (Andover), as well as committee chairman Bud Nornes (Fergus Falls) and members King Banaian (St. Cloud) and Mike Benson (R-Rochester).

It calls on the office to study, among other things:

• the rights and responsibilities of students;

• how for-profit schools protect students' intellectual property rights;

• how the schools communicate what's expected of students -- and when expectations change; and

• recourse for graduate students if a dispute -- such as over a perceived conflict of interest -- arises.

The bill would have the office report back to the legislature by Jan. 15, 2013, and offer recommendations for

changes, if they're necessary.

Scott told the committee:

"The purpose of the study ... is to get recommendations, and then put (laws) into statute to protect students."

I have a call in to Capella and will add its reaction when I get it.

For-profit schools have been in the government's hot seat since last summer, when a GAO report showed several for-profit colleges engaging in deceptive marketing tactics, among other transgressions.

Capella University has generally remained free of accusations, though the U.S. Senate Committee on Health, Education, Labor and Pensions has asked the company, along with others, for information on how it does business. (To my knowledge, the information has not been released.)

However, a former Capella Ph.D. student, Mary Swenson, told the House committee yesterday that one of her instructors, Sharon Bender, stole her work. She said she found the school adversarial toward her when she complained, and when she couldn't find satisfaction, she ended up taking the case to court. (A copy of the story on the case is further down.)

Along the way, the school asked her to leave the program, and she got her degree elsewhere, she told the committee.

Swenson told me she lost the Bender case on appeal, and when she tried to sue Capella University itself in Hennepin County over the matter, the court threw out the case. She was told the court had no precedent for the case, and was not equipped to hear such a case. (I've got calls out on that one.)

She told the committee:

"I think that there’s an inherent conflict of interest that comes about if there’s a problem when a student is involved in academia with an issue with the school. And whether they like it or not, they wind up being in adversarial position. Consequently, there is no procedure for a student to have any kind of alternative resolution or dispute mediation with a school. They are pretty much at the mercy of the institution (which) is conflicted, of course, with protecting their liability.

So whenever there is a concern, there is not a clear procedure for students to get restitution or to even be able to obtain their degrees, as was in my case. And even if you go to court, the courts refuse to acknowledge or listen to anything that has to do with these issues."

The whole nine-year affair cost Swenson more than $150,000, she told the committee. She now works as a leadership consultant.

For perspective, it would be helpful to know whether nonprofits and state schools have mechanisms to resolve cases such as Swenson's. Legislators asked the state Office of Higher Ed, but officials there told them they weren't sure. (I'll see what I can find.)

My MPR colleague, Paul Tosto, wrote about the original case against Bender when he was a reporter for the Pioneer Press. His article is no longer available, but I did find a copy of Emily Gurnon's April 2009 wrap-up from the Pioneer Press -- with no link, however.

Here's that story:

A former online instructor will not be required to pay $60,000 to a Ham Lake dissertation student who claimed the instructor stole her work, the state Court of Appeals has ruled.

The appeals court reversed an Anoka judge's ruling that Sharon Bender owed student Mary Swenson the money in damages for breach of fiduciary duty.

Bender "neither owed nor breached a fiduciary duty" to Swenson, in part because a potential business relationship they had discussed never materialized, the court ruled Tuesday.

"No money, property or other valuable interest changed hands, and Bender never obligated herself to act for Swenson's benefit in an economic capacity or in any role other than advisor," Judge Kevin G. Ross wrote for a three-judge panel.

Swenson's attorney, Jill Clark, said she had not yet read the ruling and declined to comment Thursday.

Swenson, a consultant, began working toward a Ph.D. in organizational psychology from the Minneapolis-based online Capella University in 2000. She eventually chose Bender as one of the members of her dissertation committee and continued to work with her even after Bender was no longer on the committee.

The two never met during their association; Bender lived in New Jersey, and their communications were strictly via e-mail and telephone.

Based on her research on women who transform into leaders during a crisis, Swenson said she came up with a model on how businesses could train employees to solve problems, make decisions and resolve conflicts.

Bender told her it had the potential to be bigger than management guru Stephen Covey's "Seven Habits of Highly Effective People," according to an e-mail provided by Swenson.

Eventually, the women began to disagree about how to attribute credit for abstract theoretical concepts that they had discussed, the court ruling said.

Swenson sued, claiming she saw "thinly veiled" versions of her own writing on Bender's Web site. Bender turned the tables on Swenson, saying she had plagiarized Bender's work.

Swenson claimed that accusation was "sabotage" that led to her failing her dissertation. The district court in Anoka ruled that Bender should pay Swenson $60,000 -- the money it had cost Swenson to attend Capella without earning a degree.

But the appeals court said Bender was not Swenson's fiduciary, or a person "who is required to act for the benefit of another person on all matters within the scope of their relationship," the court wrote, quoting Black's Law Dictionary.

"Given Bender's roles as adjunct instructor at Capella and as member of the committee assigned to assess Swenson's academic paper, Swenson should have known that Bender had an independent obligation to Capella that at least paralleled, if not superseded, her obligation to Swenson as it regards the dissertation's subject matter," the court wrote.

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