forprofit

Owner of Defunct For-Profit Charged With Illegal Closing

Ernesto Perez, the owner of the defunct Dade Medical College in Miami, was charged with two misdemeanor counts related to the abrupt closure of eight of the college's campuses, according to The Miami Herald.

About 2,000 students and 400 employees were affected by the closure. Under state law, college owners must notify Florida's Commission for Independent Education at least 30 days before closing. Investigators found that Perez notified the state, students and later the commission within a five-hour time frame.

The college closed in October 2015 after receiving increased scrutiny from federal officials.

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For-Profit Admits Rules Violations, Shuts Down

Career Point College, a for-profit institution in San Antonio, notified students and faculty members that it is shutting down, The San Antonio Express-News reported. A letter from the college said that three long-term employees had "collaborated to violate the rules related to student aid funds." After the college reported these violations to the U.S. Education Department, the department rejected a plan by the college to repay funds it received "inappropriately" and restricted the use of federal funds at the college, forcing the shutdown.

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DeVry settles job placement claims with U.S. Education Department

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Settlement between for-profit university and Education Department resolves charges over unsubstantiated advertising about job placement, but Federal Trade Commission lawsuit over same claims remains.

Breaking: DeVry Settles on Job Placement Claims

The U.S. Department of Education announced today that it reached a settlement with DeVry University over a charge that the for-profit institution used unsubstantiated job placement claims in recruitment and advertising materials.

Last year, the department requested that DeVry provide data and information to back the institution’s claim that, since 1975, 90 percent of its graduates were employed in their field of study within six months of graduation. The Federal Student Aid Office determined that DeVry could not provide sufficient evidence to support that claim.

The settlement requires DeVry to post a five-year letter of credit no less than $68.4  million. The institution must also take steps to rid the internet of the “since 1975” marketing language on its own website and on websites not under its direct control.

“The settlement in no way hinders DeVry University’s ability to serve current or future students,” said a statement from the institution’s parent company, DeVry Education Group. “DeVry University is pleased to have resolved the notice in full cooperation with the department and continues to cooperate with the department to resolve the remainder of its August 2015 investigation. The settlement allows DeVry University to continue communicating its strong student outcomes while providing assurances regarding the extent of its graduate employment data.”

DeVry is still facing a Federal Trade Commission lawsuit over its job placement rates and claims.

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Laureate-Owned Walden U Under State Review

Walden University's online Ph.D. programs are under review by the Minnesota Office of Higher Education, according to NBC News. The university is a for-profit based institution that is also the U.S. flagship of Laureate Education.

The review is following news reports that some students felt victimized by the institution's practices and were forced to take on large student loans. Laureate has faced public scrutiny in recent months after it was revealed that former President Bill Clinton received nearly $18 million in payments from the company as its honorary chancellor. Clinton stepped down from the position last year prior to Hillary Clinton's presidential run.

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B Lab Releases Standards for Colleges

B Lab is a nonprofit group that issues a seal of approval to companies across 120 industries that adhere to voluntary standards based on social and environmental performance, accountability and transparency. After a two years of work, the group on Friday released a new benchmarking tool for colleges. The voluntary standards are designed to enable comparisons of both nonprofit and for-profit institutions.

"B Lab recognizes that the cost and outcomes of higher education, particularly regarding for-profit institutions, have become increasingly controversial, but regardless of structure institutions should put their students’ needs first," Dan Osusky, standards development manager at B Lab, said in a written statement. "We see our role as the promoter of robust standards of industry-specific performance that can be used by for-profits and nonprofits alike to create the greatest possible positive impact and serve the public interest, ultimately by improving the lives of their students."

A committee of experts, working with HCM Strategists and with funding from the Lumina Foundation, devised the standards. Laureate Education, a global for-profit chain, already uses the assessment tool.

Hundreds of colleges, many for-profits, seek a new accreditor

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National accreditor ACCSC gets inquiries from nearly 300 colleges overseen by ACICS, most of them for-profits. Critics of accreditors will be watching as the agency reviews the flood of applications.

Clinton Campaign Criticizes Mandatory Arbitration

As part of a broad statement on corporate regulation, the presidential campaign of Democrat Hillary Clinton on Monday criticized the use of mandatory arbitration agreements in higher education. Some colleges, primarily in the for-profit sector, require newly enrolling students to agree to settle any disputes through arbitration rather than through a legal challenge. Consumer groups and some congressional Democrats, including Senator Elizabeth Warren, have said the companies' approach to arbitration often is unfair to students.

The Obama administration recently sought to ban mandatory arbitration agreements for all federal-aid-eligible colleges, as part of a proposed set of rules aimed at clarifying and expanding students' options for applying to have their federal loans forgiven. Clinton appears to support that move, saying mandatory arbitration clauses too often tilt the playing field to corporations.

"When the for-profit Corinthian Colleges collapsed, leaving thousands of students saddled with student loan debt, students were generally unable to sue because they had unknowingly signed away their right to take the school to court," the campaign said.

Some major for-profits, including DeVry Education Group and the Apollo Education Group, which owns the University of Phoenix, in recent months have voluntarily ended their use of the arbitration agreements.

Beauty School Chain Closes Abruptly

Regency Beauty Institute closed all 79 of its campuses this week, the for-profit chain announced on its website. The Minnesota-based Regency apologized to students for the "abrupt nature" of the news.

The beauty school chain had been struggling with sagging enrollments and losing millions of dollars in recent years, reported the Star-Tribune. And the chain's owner told the newspaper that gainful employment regulations -- new federal rules aimed at for-profit and other vocational programs -- threatened Regency's access to federal financial aid.

"In short, the organization does not have the cash to continue to run the business. There are multiple intertwined reasons: declining numbers of cosmetology students nationwide, a negative characterization of for-profit education by regulators and politicians that continues to worsen, and, in light of these factors, an inability to obtain continued financing," the company said. "This is not another case of a school being forced to shut down because it was accused of wrongdoing. We held ourselves to high educational and ethical standards."

GI Bill Benefits and ACICS Colleges

Military and veteran students who attend colleges that are accredited by the Accrediting Council of Independent Colleges and Schools (ACICS) should be able to continue receiving Post-9/11 GI Bill benefits to attend those institutions, at least for another 18 months. 

The U.S. Department of Education last week said it would back a federal panel's decision to eliminate ACICS, a national accreditor that oversees 245 colleges that collectively enroll roughly 600,000 students. The accreditor also is the gatekeeper for federal aid at 700 GI Bill-approved programs, the U.S. Department of Veterans Affairs said last week in an email to students who are enrolled in those programs. However, the U.S. Congress has passed legislation to allow GI Bill recipients to continue attending ACICS-accredited colleges. President Obama is expected to sign the legislation.

"At this point nothing changes for you for at least the next 18 months," said Curtis Coy, deputy under secretary for economic opportunity at the VA, in the email to students. "We would, however, suggest you may want to re-evaluate your educational goals and decide that your current school and program will either meet your need for the next 18 months or that you may want to consider other options, courses and/or schools."

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