SALT LAKE CITY — Former Utah Gov. Mike Leavitt says a newly released audit of Western Governors University by the U.S. Department of Education's Office of Inspector General was a "sneak attack by the past on the future."

The audit report recommends that the nonprofit online university repay $713 million in federal student financial aid claiming faculty did not have "regular and substantive" interaction with students, something WGU officials dispute. Moreover, the audit says the university, based in Salt Lake City, should be ineligible to receive any more federal aid.

Leavitt said in an interview Friday that federal auditors are taking a requirement in the statute and "torturing its meaning to draw its conclusion," referring to a 1992 law that defines federal financial aid eligibility for distance education programs.

"It’s just Neanderthal thinking that has been revealed in this report,” he said.

According to the report's findings, many courses offered by WGU do not meet the distance education requirement because they were not designed for "regular and substantive interaction" between students and faculty. The audit says the courses should have instead been labeled as correspondence courses.

The whole thing turns on the question "how, and not if, you have contact with a student," Leavitt said.

"I would ask you, how do you have contact with your bank? We all interact electronically now. With our family, we all interact frequently over Facebook and we feel like we’re in better touch. That’s the issue here," he said.

But the overarching concern is that financial aid regulation has not evolved as the number of higher education institutions that exclusively offer online instruction proliferate.

"I think that the Congress will come to understand they need to change this statute, and I would think the secretary of education should step in fairly quickly or they’re going to discourage innovation," Leavitt said.

His sentiments were echoed by Utah Gov. Gary Herbert, who, as the state's top elected official, serves on Western Governors University's board of directors.

"State innovation in education has moved quickly. It’s time for Congress pick up its pace and support successful innovations in higher education, including distance, online and competency-based education. This is especially important in states like Utah, which have large rural areas," Herbert said in a statement.

Leavitt predicted that the now 20-year-old institution, of which he played a key role in founding, "will be fully absolved of any requirement to pay."

WGU, a pioneer in competency-based education, has paved the way for a growing number of online universities, he said.

"Emulation is high flattery. The reason people are looking at it is because it produces a high-quality outcome for a very low cost. A library now in higher education will cost $100 million minimum. The entire investment in this institution is $45 million, $50 million," he said.

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Western Governors University should repay more than $700 million in federal financial aid, audit says

Federal auditors say Western Governors University should repay more than $700 million in federal financial aid after finding the Utah-based nonprofit university's largest degree programs fall short of eligibility requirements.

But beyond cost savings, the competency-based model has vastly expanded access to high-quality higher education, Leavitt said.

"The institution is now 20 years old. It has now had 85,000 graduates. It is growing by 20 percent a year. It’s been praised by two presidents of the United States. It’s seen by virtually everyone as a model that is sustainable to provide high-quality higher education to a group of citizens who up to this point are denied access," he said.

"One really does have to ask the question ‘Why now?' It’s beyond explanation as far as I’m concerned," Leavitt said.

The Department of Education will conduct a 30-day comment period after which Leavitt said he believes WGU's appeal will succeed.

"The thing about it is, the record just speaks for itself. Anyone looking to see how you produce high-quality results for less money and it’s not shareholders, it’s stakeholders, students, employers, accrediting agencies and anyone in a position to judge quality or value, who have lauded this model," Leavitt said.

“I’m annoyed by it but I’m not worried about it.”

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