Career Education Corporation announced yesterday that it will stop enrolling new students at the Le Cordon Bleu Colleges of Culinary Art after Jan. 4, 2016, and wind down operations.
The for-profit company attempted to sell the 16 culinary campuses this year, but negotiations with a potential buyer failed. Le Cordon Bleu was the for-profit company's most well-known brand. The campuses are expected to remain open until September 2017.
"New federal regulations make it difficult to project the future for career schools that have higher operating costs, such as culinary schools that require expensive commercial kitchens and ongoing food costs," said Todd Nelson, president and chief executive officer of Career Ed, in a news release. "Despite our best efforts to find a new caretaker for these well-renowned culinary colleges, we could not reach an agreement that we believe was in the best interests of both our students and our stockholders."
The for-profit plans to "refocus" resources on Career Ed's online university and provide Le Cordon Bleu students the appropriate resources in the "teach out."
Massachusetts Commissioner of Higher Education Carlos Santiago expressed his displeasure with the college's closing. Le Cordon Bleu enrolled 256 Massachusetts students, of which 29 are military veterans.
"I am disappointed to learn that the parent company of Le Cordon Bleu chose to announce its closure plans to the media before notifying the Department of Higher Education," Santiago said in a news release. "Massachusetts law requires notification of an institution's shutdown plans as far in advance as possible, and such plans must be approved by the department before implementation. It is the commonwealth, through my office, that will determine whether the September 2017 closure plans move forward, or whether an alternate closure plan is deemed to be in the best interest of students."
The Apollo Group, the parent company of the University of Phoenix, has made its first purchase in Germany, Phoenix Business Journal reported. At a time when Phoenix is shrinking, Apollo is growing outside the United States. Apollo paid $105 million for Career Partner GmbH, which offers 24 bachelor's programs as well as some master's programs, including an M.B.A.
New York-based Briarcliffe College will close its two campuses by the end of 2018, Newsday reports.
Briarcliffe is owned by Career Education Corporation, a for-profit college chain based in Illinois. Career Ed put the institution up for sale about seven months ago but did not find an appropriate buyer. The college isn't accepting any new students and will "teach out" the students already enrolled. Operations will end on the Bethpage, N.Y., campus in April 2018. The college's online program and the Patchogue, N.Y., campus will cease operations in December 2018.
In a notice to the state labor department, Briarcliffe acknowledged that the college was closing for financial reasons. Briarcliffe's enrollment had fallen by 50 percent in the last 10 years. According to the National Center for Education Statistics, the college enrolled about 1,700 students last year.
The operator of FastTrain -- a defunct Miami-based for-profit college -- was convicted by a federal jury Tuesday on 12 counts of theft of government money and one count of conspiracy, according to The Miami Herald.
Alejandro Amor, the operator, will be sentenced in February. Former FastTrain employees testified that Amor coached the staff on how to forge signatures and halted an internal investigation into improprieties at the college.
The seven-campus chain closed in 2012, but gained notoriety after federal prosecutors accused the for-profit of submitting fraudulent financial aid claims for 1,300 students, many of whom did not hold legitimate high school diplomas. The college was also accused of hiring former strippers to work as recruiters.
Submitted by Paul Fain on November 23, 2015 - 3:00am
Senator John McCain and Senator Lamar Alexander, both Republicans, last week wrote to U.S. Education Secretary Arne Duncan to seek information about what they called the "unfair targeting" of the University of Phoenix and other for-profits by a Obama administration-created interagency task force. The task force includes eight federal agencies, the two senators said. In the letter they expressed concern about a lack of information about the task force's authority, mission, duties and activities.
"It is our hope that these publicly funded resources will be directed toward a fair and transparent review of issues facing for-profit and nonprofit institutions, and not for a preconceived, political agenda to stir the pot of public perception," the senators wrote. "To do so otherwise would neither be productive nor benefit the public trust."
The letter follows a similar correspondence from Republican senators to Duncan on the task force, which McCain also signed, that focused on a U.S. Department of Defense inquiry of Phoenix.
U.S. Department of Education officials have determined that a slew of additional campuses owned by Corinthian Colleges misrepresented job placement rates, a finding that could help some 85,000 former students have their federal loans canceled.
The department announced Tuesday that hundreds of programs at the now-defunct for-profit chain's Everest and Wyotech campuses in California misled students about their job prospects after graduation. Officials also said they found misrepresentation at Everest University online programs based in Florida.
The announcement is essentially an expansion of the scope of the department's April findings against Corinthian-owned Heald College. At that time, the department slapped Heald with a $30 million fine, which sunk Corinthian's efforts to sell off those campuses and helped push the struggling company into bankruptcy several weeks later.
The department earlier this year said it would "expedite" the debt relief applications for about 40,000 former Heald College students because officials already had enough evidence to process their claims. (As of August, though, only 1,500 of those former students had actually filed claims).
With Tuesday's findings, the department said an additional 85,000 students at the affected WyoTech and Everest campuses will be eligible to have their loans canceled.
The department described its findings as the product of a joint investigation with California Attorney General Kamala Harris, whose office sued Corinthian more than two years ago, alleging misrepresentation of job-placement rates among other wrongdoing.
Harris said in a statement that the "findings will expand the pool of Corinthian students eligible for streamlined student loan relief options." She thanked the department for "joining" her office "to keep Corinthian accountable for their actions and providing debt relief to students who were misled."
Education Secretary Arne Duncan said the "results of our joint investigation will allow us to get relief to more students, more efficiently."
The U.S. Department of Justice on Monday announced a $95.5 million settlement with the Education Management Corporation to resolve allegations that it defrauded the government. The Huffington Postreported on the settlement over the weekend.
The agreement ends a long-running lawsuit that accused the for-profit college chain of illegally paying bonuses to admissions recruiters based on the number of students they enrolled.
Those allegations were brought to light in a whistle-blower lawsuit by a former employee in 2007. The Justice Department, as well as another former employee, joined the suit in 2011.
The Education Management Corporation owns the Art Institutes, Argosy University, Brown Mackie Colleges and South University chains. The company was taken private last month amid falling enrollments and revenue.
Loretta Lynch, the U.S. Attorney General, called the settlement "historic," noting that the payment would be the largest false-claims payment by a for-profit institution in history. EDMC's actions were "were not just a betrayal of students' trust," Lynch said, "they were a violation of federal law."
For-profit, Colorado-based Westwood College has reached a $15 million agreement with the Illinois attorney general, according to a report from a Chicago ABC News affiliate.
The college voluntarily agreed to pay $15 million to wipe out loans criminal justice students have obtained through Westwood since 2004. However, the credit does not cover the students' federal loans.
Illinois Attorney General Lisa Madigan launched the lawsuit almost four years ago after receiving complaints from students and former students about the "exorbitant costs, poorly accredited programs and failure to get a job in the field their degree was in."