forprofit

California Suspends Student Aid to Heald College Chain

The California Student Aid Commission has suspended state student aid for those enrolled at the 10 California campuses of the for-profit Heald College chain, The Sacramento Bee reported. The commission said that Heald had failed to submit documents required to show that it is financially stable. The move by the commission halted about $1 million in payments to Heald, a figure that could reach $14 million by June. Heald officials criticized the move and said that they had hired a new accountant. Heald officials also said the move could endanger the sale of Heald, which is part of the Corinthian Colleges group, which has faced severe financial and regulatory difficulties and has been selling off some parts of its operations. Heald has been considered one of the more attractive assets that Corinthian might sell off.

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Education Corp. Buys 38 Kaplan College Campuses

Education Corporation of America (ECA), a privately held for-profit chain, will buy all 38 Kaplan College campuses. Kaplan Higher Education will continue to operate its Kaplan University and eight professional schools.

Terms of the deal were not released. But both sides said the all-stock transaction would give Kaplan a "preferred equity interest" in ECA. The 38 Kaplan College campuses currently enroll 12,500 students. The campuses lost $12.5 million last year, according to a corporate filing, and had a total revenue of $275 million. ECA operates Virginia College, Golf Academy of America, Ecotech Institute and New England College of Business. Virginia College is the largest, with 27 campuses and online programs, mostly in the Southeast.

"The combined ECA footprint, after the transaction closes, will include more than 70 career-oriented campuses and online programs across 20 states, serving approximately 30,000 students," the company said in a written statement.  

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Career Education Corp.'s CEO Resigns

Scott W. Steffey will step down as president and chief executive officer of Career Education Corporation, the major for-profit chain announced. Steffey took over the top post of the publicly traded company in 2013. An industry analyst said his departure and brief tenure were surprising.

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For-Profit Group Files Motion in Gainful Employment Suit

The Association of Private Sector Colleges and Universities on Friday filed a motion calling for a judge to issue a ruling without a trial on the for-profit trade group's legal challenge to the U.S. Department of Education's gainful employment rules.

The regulations would impose penalties on vocational programs at for-profits and community colleges that do not meet standards the department has set for graduates' debt-to-earnings ratios. (The rules would only apply to non-degree programs at community colleges, however, while applying to degree and non-degree programs at for-profits.)

The for-profit association quickly sued after the rules were released, calling them arbitrary. A department official, however, said at the time that he was confident the regulations would withstand legal scrutiny.

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For-Profit Programs Under Scrutiny Halt Enrollment in Minnesota

Two for-profit institutions in Minnesota, Globe University and the Minnesota College of Business, have halted enrollment in a criminal justice program that is facing scrutiny and lawsuit by the state, The Star Tribune reported. Officials of the institution did not respond to requests for comment but have defended their programs in the past. State officials have said that students were recruited and led to borrow without knowing that the criminal justice program was not recognized as valid preparation for law enforcement jobs in the state.

 

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NLRB Affirms Ruling for Ex-Employee of Grand Canyon U.

The National Labor Relations Board released a decision Tuesday affirming an earlier 2013 ruling saying that Grand Canyon University wrongly fired an employee for talking about her working conditions. The ruling pertains to a case involving three former employees working in for-profit Grand Canyon’s “grad team,” which pursued “leads” on potential students to enroll in the university’s graduate programs in Christian studies and criminal justice. All three frequently discussed with each other, coworkers and their managers concerns about the quality of leads referred to them, the limited degree programs in which they were permitted to enroll students and the difficulty of meeting enrollment quotas, according to the decision.

 

They were fired in part for those conversations, which violated a clause in the university’s Employee Counseling Statement prohibiting employees from discussing with each other the terms and conditions of their employment. But the NLRB found in 2013 that the three employees had engaged in “protected concerted activity,” and that the university violated labor law by threatening to fire them for and interrogating them about their speech. (Grand Canyon is not unionized.) The labor board said that the university had only wrongly fired one employee, Gloria Johnson, however, because there seemed to be other, legitimate reasons for firing the other two employees.

 

Questions about that decision’s legitimacy arose as Grand Canyon filed an appeal when political opponents of President Obama challenged the constitutionality of two of his appointments to the NLRB during a three-day Congressional recess. After the appointment question was settled, the board considered the decision de novo and affirmed it. The NLRB has ordered Grand Canyon to stop threatening to fire employees who discuss their terms and conditions of employment, and to reinstate and “make whole” Johnson, among other things. Johnson could not immediately be reached for comment. Bob Romantic, a university spokesman, said via email that the NLRB "looked at four complaints from 2010, of which three were dismissed. Concerning the fourth complaint [Johnson], we are confident from our internal investigation that we did the right thing for the university and our students regarding a compliance violation by one of our employees. We are reviewing the NLRB’s decision and will consider all appropriate actions, including an appeal.” William A. Herbert, executive director of National Center for the Study of Collective Bargaining in Higher Education and the Professions at Hunter College of the City University of New York, said the case was significant in that it explored the “scope” of what can be raised in interrogations of employees by reinforcing the rule that employers cannot interrogate employees about protected, concerted activities.

Guaranty agency buys half of Corinthian Colleges and forgives $480 million in student debt

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ECMC closes deal to buy 53 Corinthian campuses, earning praise from federal agencies and some consumer groups for deal to forgive $480 million in students' private loans.

Wisconsin Gov. Wants to Cut For-Profit Regulatory Board

The budget proposal from Wisconsin's Republican governor, Scott Walker, would eliminate the regulatory board that oversees the state's 244 for-profit institutions, the Wisconsin State Journal reports. The Education Approval Board sought tighter regulation of the sector two years ago, but that plan died quickly. Walker wants to cut the board to "decrease the regulatory and fiscal burden" on for-profits, according to the newspaper.

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Essay on the significance of the Super Bowl being played in the University of Phoenix Stadium

With all the Super Bowl hype (and there was plenty before the game, given Deflategate), little attention has been paid to the irony of where the actual game was played in Arizona: the University of Phoenix Stadium. Yes, really. 

Is there anything we can learn from the Super Bowl’s location for those of us toiling in the weeds of higher education?

The University of Phoenix, which boasts online enrollment in excess of 200,000 students at present (a decline from only several years ago when they had well more than half a million students), offers hundreds of degree programs at the undergraduate and graduate levels. Its Web site promotes a variety of tutoring and support programs, and the university has actual physical locations for classes in 39 states, although most courses are offered online.  

There is one thing the University of Phoenix most assuredly does not offer: intercollegiate athletics. Why would an institution of higher learning have a stadium named after it when that institution has no athletic offerings?

So, here’s a brief quiz as to possible explanations for why the University of Phoenix agreed in 2006 to pay $154.5 million over 20 years for the right to have its name used in perpetuity on the then new stadium in Arizona. Pick a, b, c, d, or e:

a. The university and its parent company, Apollo Education Group (enterprise value of $2.11 billion) could afford it. Compare this amount to the size of the 15th largest university endowment (Duke University) --  $6 billion in 2013.

b. It provides excellent ongoing marketing of the university, with its name promoted as part of the events held at the stadium, which include one of the most highly viewed sports events in the world. (Note: It’s the site of the Final Four in 2017.) Aren’t all higher education institutions investing in ways to market themselves better?

c. The stadium is big, holding up to 72,200 people with room for expansion, paralleling the university’s expansive approach to online learning that can serve thousands of students. What college is not looking to grow enrollment?

d. The construction of the stadium involved many partnerships, including with the Arizona Sports & Tourism Authority, and the University of Phoenix also just partnered with historically black colleges. Which institution is not seeking increased revenue or savings through partnering?

e. All of the above.

The answer, of course, is all of the above.

Now, for the bonus question: Who is the star high school running back who indicated he considering attending the University of Phoenix (actually, if the truth be told, he might likely want to play in its stadium for the Cardinals a year or two after he starts college)? The answer is Soso Jamabo, who is cleverly taking a swipe at the absurdity of college recruiting by conducting interviews against a backdrop containing the names of institutions he might ostensibly choose to attend -- including the University of Phoenix. By the by, the University of Phoenix tweeted that it was accepting Jamabo as a student.

Here’s a more deliberative take on all this. The very questions raised by the Super Bowl’s location are emblematic of the issues facing higher education: developing unique marketing opportunities to improve student enrollment and institutional name recognition; sorting through complex fiscal choices including strategies for developing auxiliary revenue streams; assessing the role, quantify and quality of online learning for students; addressing the challenges and cost of intercollegiate athletics; identifying partnership opportunities that improve the student experience and reduce costs or increase revenue; and determining what new construction merits the expenditure and accompanying borrowing. 

University of Phoenix Stadium brings to mind the Shakespearean question, “What’s in a name?” spoken by Juliet. The answer here is this: nothing and everything.

Karen Gross is the former president of Southern Vermont College.

 

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Corinthian Sale Postponed

The proposed sale of 56 campuses of the for-profit Corinthian Colleges chain to ECMC, a student loan guarantor, has been postponed until next month, Corinthian said in a corporate filing. The deal, which the U.S. Department of Education brokered, had been scheduled to close in January. It was pushed back earlier this month, and now moved to February.

Corinthian said the closing of most of the campuses included in the purchase agreement is now scheduled for February 2. A second closing for the remaining campuses will follow.

"Although the company and the purchaser have made substantial progress towards the satisfaction of conditions to closing," Corinthian said, "and expect to satisfy the remainder soon, not all of such conditions were satisfied in time to conduct an initial closing."

The deal has been controversial. Some consumer groups have opposed the sale to ECMC, calling the nonprofit agency a "troubled entity" and saying the arrangement will be bad for students. The department, however, has defended the sale, saying it averts "disruption and displacement" of 40,000 students and strengthens their "education prospects."

ECMC on Wednesday issued a written statement about the delay.

“While we continue to make good progress, the enormity of the transaction and the regulatory approvals needed prior to close have extended our target closing date to early in February," the guaranty agency said. "We are pleased with all we’ve been able to accomplish over the last several weeks, especially given the holiday timing, and are continuing to move full steam ahead with our plans to make a difference as a nonprofit provider of career school education driven to promote the long-term success of our graduates.”

(Note: This article has been changed from an earlier version to include new information from ECMC and a Corinthian corporate filing.)

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