Submitted by Paul Fain on January 6, 2015 - 3:00am
Kaplan Higher Education, a for-profit chain, on Monday agreed to a $1.3 million settlement with the U.S. Attorney for the Western District of Texas. The civil settlement resolves whistleblower allegations that Kaplan employed unqualified instructors at its campuses in Texas, the U.S. Attorney's office said in a written statement. The agreement did not include a finding of wrongdoing by the company. The for-profit settled to avoid the "expense of protracted litigation," a Kaplan official said in a written statement.
Herzing University, a midsized chain of for-profit colleges, has converted to a nonprofit institution, The Milwaukee Journal-Sentinel reported. Herzing has 6,000 students in campuses in eight states. Herzing is among the institutions that said new federal regulations on "gainful employment" would make it hard to operate.
Submitted by Paul Fain on December 19, 2014 - 3:00am
Career Education Corp. on Thursday said it plans to sell Le Cordon Bleu, a chain of 16 culinary campuses. The company, which is one of the largest publicly traded for-profits, said in a written statement that the planned sale would allow it to "reallocate funds across our portfolio." Le Cordon Bleu is one of Career Education's better-known brands. With a current enrollment of 10,100 students, the culinary schools brought in $178 million in total revenue last year.
Submitted by Paul Fain on December 18, 2014 - 3:00am
A coalition of 46 student, consumer, veterans and civil rights groups on Wednesday wrote to the Obama Administration and U.S. Department of Education to oppose the proposed sale of 56 Corinthian Colleges' campuses to ECMC, a nonprofit student loan guarantee agency.
"The terms of the proposed sale to ECMC would not give students the choice of completing or a fresh start, while leaving the campuses in the hands of a troubled entity with no educational experience," the groups wrote. They called on the department to exercise more flexibility in allowing Corinthian students to seek loan discharges. The letter also suggests stricter terms for an ECMC deal, such as requiring that the campuses meet "gainful employment" regulations for seven years.
The sale, which department officials back, is expected to close in January.
Submitted by Paul Fain on December 17, 2014 - 3:00am
A U.S. appeals court on Tuesday sided with a lower court's decision to dismiss a class-action lawsuit the State of Oregon had filed against the Apollo Education Group. The suit alleged that Apollo, which owns the University of Phoenix, had made misleading statements about its enrollment and revenue growth. As a result the state's pension fund lost $10 million, according to the lawsuit. But the courts -- including the U.S. Court of Appeals for the Ninth Circuit, which ruled Tuesday -- have rejected those claims, finding that Apollo's statements were lawful "business puffing."
Submitted by Paul Fain on December 15, 2014 - 3:00am
The Salter Schools, a for-profit chain in Massachusetts, has settled with the state's attorney general, Martha Coakley, over allegations of misrepresented job-placement rates and deceptive student recruitment, according to a news release from Coakley's office. Salter agreed to pay $3.75 million, the bulk of which will be used to help roughly 600 of the schools' former students pay down loans. The company told The Boston Globe that it disputes the allegations, but did not elaborate to the newspaper.
Coakley is conducting a broad investigation of the for-profit industry. She has filed several lawsuits as part of the probe, including one against Corinthian Colleges. The Salter settlement is the second and largest of the settlements her office has secured so far.
Submitted by Paul Fain on December 11, 2014 - 3:00am
College enrollment has declined by more than 1 percent for three consecutive years, according to newly released data from the National Student Clearinghouse Research Center. The drop of 1.3 percent is slower than that of the previous two years, according to the report, but still reflects a loss of almost 265,000 students. Most of the decline is among adult students, many of whom have joined the workforce as the economy rebounds.
Submitted by Paul Fain on December 11, 2014 - 3:00am
A group of 13 Senate Democrats want the U.S. Department of Education to discharge federal student loans for some current and former students of Corinthian Colleges. In a letter to Arne Duncan, the Senators urged immediate discharges for any borrowers who are covered by lawsuits filed by federal and state agencies against the troubled for-profit chain, which is being dismantled.
The group, which includes Sen. Elizabeth Warren, a Massachusetts Democrat, said the department has the legal authority to forgive loans when students have legal claims against their colleges. They said lawsuits in California and Massachusetts directly relate to lending to Corinthian students, as well as to the education they received.
Kent Jenkins, a spokesman for Corinthian, said it would be unjust for the federal government to act on unproven allegations that are being contested in court. "Their letter argues that court is an unnecessary formality," he said in a written statement, "and its disregard for basic fairness and due process is deeply troubling."