The hits keep on coming for Career Education Corporation.

The California agency that regulates for-profit institutions found last week that a campus owned by Career Education "willfully" provided misleading and falsified information and omitted other information that "persuaded prospective students to enroll" in its educational programs. The state Bureau for Private Postsecondary and Vocational Education stopped short of revoking the Brooks Institute of Photography's license to operate, citing the severe impact such a move would have on current students. 

But the agency imposed a significant set of restrictions on Brooks's operations, including barring it from enrolling new students until it submits a slew of information and requiring it to get written statements from employers of all of its current and future graduates. 

It also suggests that the campus may be required to make restitution for students who were affected by the college's violations of state law.

The action in California comes weeks after the company, which operates more than 80 campuses in the United States, Canada, Europe and the Middle East, announced that the U.S. Education Department had imposed a freeze on the establishment of any new campuses or acquisitions by the company while it investigated Career Education's compliance with federal student aid regulations. (Career Education did get some positive news lately, when the accreditor of its Brooks College campus in Long Beach, Cal., said it was ending a probation that had lasted more than a year.)
 
Last week, though, in a letter to the president of the Brooks Institute, in Santa Barbara, the California postsecondary education bureau said it had concluded that giving the campus an "unconditional grant of approval to operate is not in the public interest." The agency cited several reasons for its decision, finding that the college "presented false and misleading information to prospective students regarding employment opportunities," including the availability of jobs, potential salaries, and the college's career placement services, and provided "false and misleading information" the state agency about the placement and salaries of its graduates.
 
The bureau's letter, a copy of which was obtained by Inside Higher Ed, said its investigation had found that 67.5 percent of Brooks's graduates in 2003 were employed part-time, and that the 45 graduates that year who were employed full time had an average salary of $26,000, and average loan indebtedness of about $74,000.

The postsecondary education bureau imposed several conditions on Brooks during its two-year period of conditional approval, including requiring that it:

• Refrain from enrolling new students in its degree or nondegree programs until it has demonstrated to the agency that it has verified accurate placement information for all of its 2003 graduates and given all current and prospective students a form with that corrected information.
• Provide a plan to the bureau that says in detail "how it will provide equitable restitution to all students who enrolled from May 4, 1999 [when Career Education took ownership of the institute] to the present." This restitution may be necessary, the agency's letter suggests, because the college's violations of state law may give students who enrolled based on false information the right to invalidate their enrollment agreements.
• Submit information about employment for each current and future graduate, including written statements from employers and the graduate.

Career Education officials did not return telephone calls seeking comment. But in a statement cited by the Financial Times, the company said: "While we have not had the opportunity to fully review and to respond to this notice, we are committed to resolving any issues that may place conditions on the school's approval to operate."

Officials at the California agency declined to comment.

But a Los Angeles lawyer and critic of for-profit institutions, Mark Kleiman, said he was struck by the aggressive stance taken by the agency in the Brooks case. "It's not just what they're doing to Brooks , but its potential as a model," he said. "To the extent to which the bureau is willing to go this far in other cases to protect students at other institutions and the huge investment California makes in postsecondary ed, this is the kind of thing that could really begin to change the landscape."