Aspen University's Phoenix program falling far short on nursing test, could face closure
Challenges are mounting for Aspen University’s large Phoenix online nursing program, which could face discipline or closure if more students don't pass the licensure exam required to become a nurse.
Aspen needs an 80% or higher first-time pass rate for the nursing licensure exam this year, but so far for 2022, its pass rate is 69.4%, with 93 out of 134 students passing, according to the state nursing board.
That means Aspen needs at least an 89% pass rate for the rest of the year to average out to the required level.
Without that bump up, the state nursing board could require Aspen teach out its existing students within two years and then could revoke its program approval.
The Arizona State Board of Nursing on Friday discussed some of its latest ongoing investigation into the private for-profit school’s online nursing program. Board staff would not provide a copy of the investigative report, citing confidentiality, but the allegations appear to revolve around the potential enrollment of new students into the program, which is not allowed under the probation, among other issues.
An attorney for Aspen told the board Friday those facts were "very much in dispute" and that the allegation about an improper enrollment was unfounded. Aspen's attorney, Geoffrey Sturr, asked board members to keep an open mind until the investigative report is complete and Aspen has had a chance to respond to it.
The nursing board will continue to investigate potential violations of the nurse practice act and its probation agreement with Aspen, and Aspen can defend itself. In the meanwhile, scores remain a concern as well.
Class action lawsuit from students
Michael Mathews, CEO of Aspen Group, the parent company of Aspen University and United States University, said on a July earnings call that improvements are in place and “we are doing everything humanly possible to improve these scores.”
But the latest scores for the licensure exam, known as NCLEX, show staying afloat will take tremendous work.
Phoenix-based Aspen University also is facing a class action lawsuit from students claiming they were misled about the quality of the nursing program, and the university’s parent company is dealing with the financial fallout from Arizona regulatory action. Meanwhile, Aspen is growing fast in other states.
Aspen has found itself on shaky ground with state regulators since early this year, when the nursing board and the Arizona State Board for Private Postsecondary Education began raising questions about academic quality in the nursing program and other issues.
The nursing board issued a lengthy report in February saying Aspen was severely underperforming, given its 58% NCLEX pass rate last year and other measures that indicated “harm to students.” Aspen suspended admissions, and both boards require Aspen to regularly submit reports and updates.
A university official in April signed a consent agreement with the nursing board that placed the program on probation for at least three years until the school increased NCLEX pass rates and implemented other improvements. Per the agreement, Aspen can’t resume admissions into its core program until it hits the required pass rate and maintains it for each calendar quarter.
If Aspen doesn’t reach an 80% or higher pass rate this year, the board may review its status and could “suspend admissions indefinitely and initiate a process in which (Aspen) shall fulfill its obligations to existing students,” then have its approval revoked, according to the agreement.
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Low test scores remain a concern
Aspen officials in the spring said they were reworking curriculum, hiring more staff and an exam coach and providing increased review for students to boost NCLEX scores.
But so far, pass rates have not improved enough, at 69.6% during the most recent second quarter of 2022, down from 73.3% the first quarter of 2022, per national test data posted by the state nursing board.
All Arizona students, meanwhile, saw a pass rate of 85.9% in the second quarter of this year and 89.2% in the first quarter.
Aspen’s scores are up significantly from its 58% NCLEX pass rate in 2021, which prompted much of the initial investigation.
Yet as recently as late May, Aspen’s provost told the private postsecondary education board that NCLEX scores jumped significantly from last year, and that they expected to meet the nursing board’s requirements.
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If they don’t, a potential closure would affect large swaths of students.
Earlier this year, Aspen had about 700 students in the core nursing program in Phoenix and a similar number in the first-year prerequisite program that couldn’t move forward into the two-year core program with admissions suspended.
If admissions don’t restart, Aspen will have run out of students in Phoenix after graduating the core students in the next two years.
The school has expanded in other states as issues in Phoenix continue, with quick growth in its new pre-licensure nursing program in Atlanta. It also has programs in Tampa, Austin and Nashville. Aspen University had about 10,200 students enrolled as of April, over 8,600 of which were nursing students.
Mathews, the Aspen Group CEO, said on a July earnings call that he was confident in test scores from those other locations. The pre-licensure nursing campuses outside of Arizona “were launched with curriculum improvements and NCLEX test prep products and NCLEX coaches in place.” He also said students need higher incoming GPAs and entrance exam scores than they did in Phoenix.
“These cohorts are expected to deliver pass rates that comply with each state's requirements,” Mathews said.
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Students claim they were misled
Some Aspen students in the spring filed a class action lawsuit against the university in U.S. District Court of Arizona, claiming the school misled prospective students, omitted key information about program quality and violated Arizona’s Consumer Fraud Act.
An estimated 700 Arizona students are seeking damages for their yearly tuition payments of over $51,000, claiming they discovered after they enrolled and paid that the program was inadequate and didn’t have enough resources, testing or direct clinical hours, according to the complaint.
Students couldn’t move from the prerequisite courses to the core program, and when they tried to then switch schools, they often couldn't transfer their Aspen credits, per the lawsuit.
“Aspen made the false promises, representations, and material omissions … in connection with the sale, offers to sell, attempts to sell and advertisement of its BSN Program,” the complaint said. “Aspen’s intentionally false promises, misrepresentations, material omissions, and practices … were designed to, and in fact did, deceive and mislead” students.
Lawyers for Aspen in a response filing denied various allegations of misrepresentation and consumer fraud, and wrote that the alleged damages were “impermissibly speculative and do not flow from the breaches alleged.” The case is ongoing.
Aspen is unique among nursing programs because all its non-clinical courses are online, with some in-person labs, seminars and clinicals at Aspen’s campus in Phoenix or HonorHealth in north Phoenix.
Not much cash on hand
The instability with Phoenix regulators appears to be hurting Aspen Group financially as well.
New student enrollments at Aspen University decreased 37% year over year, largely because of stopping admissions in the Phoenix pre-licensure programs, according to a July financial release from Aspen Group. Most of Aspen Group’s revenue comes from Aspen University, including its nursing program. Mathews said in July the company was “considering various growth and financing alternatives,” but didn’t provide details.
The university’s for-profit parent company as of April 30 had $6.5 million on hand in unrestricted cash and $6.4 million in restricted cash, compared with $12.5 million in unrestricted cash and $1.2 million in restricted cash one year earlier, Aspen Group chief financial officer Matt LaVay said on the earnings call.
Aspen had to a post a hefty $18.3 million surety bond with the private postsecondary education board earlier this year, another challenge for its balance sheet.
Aspen leaders on a July 19 earnings conference call with stakeholders several times incorrectly stated what body required the bond. Mathews first said it was required by the state of Arizona; LaVay referred to it as for the state nursing board and then later corrected that to say it was for the Arizona Board of Education. The bond was actually required by the Arizona State Board for Private Postsecondary Education, a mistake Aspen clarified in a July 25 disclosure to the U.S. Securities and Exchange Commission.
A nursing board official brought up that "misinformation to investors" as one point in describing its investigation Friday.
The private postsecondary education board asked for the surety bond and placed Aspen under increased monitoring and monthly reporting in February. Aspen is expected to answer questions from the board at an Aug. 25 meeting.
Have a story about higher education? Reach the reporter at Alison.Steinbach@arizonarepublic.com or at 602-444-4282. Follow her on Twitter @alisteinbach.
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This article originally appeared on Arizona Republic: Aspen University on pace to fail requirement on students passing NCLEX
