For-profits exiting direct private loan arena

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For-profit colleges are feeling more scrutiny and pressure from states and attorneys general over their financial practices.

Online For-Profit in Colorado to Close

Jones International University, an online, for-profit institution based in Colorado, has announced plans to shut down. The university was the first online university to receive regional accreditation, which was controversial at the time, The Chronicle of Higher Education reported. Jones had seen steep enrollment declines in recent years, according to the Denver Business Journal. The university currently enrolls about 2,000 students, according to the U.S. Department of Education.

Glenn Jones, a cable television pioneer, founded the university in 1993. As part of its winding down, the university has signed a formal transfer agreement with Trident University International, another for-profit institution. In an announcement on the Jones website, the university said it "is committed to a smooth and orderly transition" for students.

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For-Profit Design School in Chicago to Close

Harrington College of Design will close, the Chicago-based for-profit announced on Wednesday. Career Education Corp., a national chain, owns Harrington. The college has struggled with declining revenue and enrollments, Crain's Chicago Business reported. Its total enrollment is currently 360 students. The college will work with Columbia College, a private institution, to ensure that those students can finish their academic programs. 

"Harrington regrets having to make this decision," the college said in a statement, "but it became necessary because of increasing financial deficits caused by multiple years of continuous declines in enrollment, as well as increased regulatory burdens facing private sector higher education institutions like Harrington."

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U.S. Will Release Remaining Colleges Under Scrutiny

The U.S. Department of Education plans to release on Friday the names of the nearly two dozen colleges it had redacted from the list of colleges it is watching more closely.

The department earlier this week released a list of 556 colleges and universities that were subject to restrictions on their student aid and extra scrutiny known as heightened cash monitoring. But officials declined to identify 23 of those institutions, 21 of which had been placed on the more stringent level of monitoring. Most of them were singled out for scrutiny after federal audits of their financial aid programs resulted in “severe findings.”

Because the department has ongoing investigations at those institutions, Undersecretary of Education Ted Mitchell said Monday, “releasing those names would impede the progress of our investigation.”

Denise Horn, a department spokeswoman, said Thursday that the decision to now release all of the names came after “further legal review and in response to follow-up inquiries.” It also comes after The New York Times editorial board on Thursday criticized the department for withholding the information, calling it a "disservice to students."

The department also plans to release Friday an updated cash-monitoring list that is current through this week. The list released earlier this week was from March 1.

Enrollment Woes Continue for U. of Phoenix

Apollo Education Group's revenue and enrollment slide has continued, according to a corporate filing released this week. The publicly traded company, which owns the University of Phoenix, had a net-revenue decline of 15 percent, or $223 million, during the six months prior to March. Phoenix's revenue was down 19 percent in this period. The university's degree-seeking student enrollment dipped by roughly 15 percent, to 213,800. The high-water mark for enrollment at Phoenix was 475,000 in 2010.

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For-Profit in Georgia Closes Without Warning

Laurus Technical Institute, a three-branch for-profit college in Georgia, closed on Monday without advance word, WXIA reported. Students arrived for classes to find signs on the door telling them the college was closed. Staff members reported that the owner, who could not be reached, sent them email messages saying he lacked the financing to continue operations.


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For-Profit Globe U. Said to Make Unlicensed Loans

Minnesota Attorney General Lori Swanson has charged in legal filings that for-profit Globe University has violated state law by making unlicensed loans with "usurious interest rates” as high as 18 percent, The Star Tribune reported. Swanson asked that the loans to nearly 6,000 students be invalidated, so the students would not have to repay them and should be reimbursed for payments they have made. The filing said that the university wasn't registered to make the loans and the interest rates far exceeded what state law permits. University officials disputed the attorney general's statements, and accused her of trying to advance a political agenda.


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Corinthian: Closed in Canada, Compromise in California

Further developments in the collapse of Corinthian Colleges:

  • Canadian authorities have shut down the 14 Corinthian institutions in Canada, finding that they no longer had the right to be licensed in the country. Bloomberg reported that officials said the action was needed to protect current and prospective students.
  • Heald College campuses in California (which are part of Corinthian) on Friday received a partial reprieve from the California Student Aid Commission, which a week earlier had blocked their students from receiving state aid, The Sacramento Bee reported. Under the compromise, the ban will continue through at least April, but if students are able to finish the semester, their aid may be provided in a lump sum at that time.
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Nonprofit university becomes a 'benefit corporation,' further blurring for-profit divide

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To tap into private investment funds while retaining its public mission, a California nonprofit university becomes a "benefit corporation." Is the status legit -- and will other colleges follow?

New University System to Focus on Health Careers

A new university system focused on health care -- and financed in an unusual way -- was announced this morning, backed by the German publishing giant Bertelsmann. Arist Education System said it would create a system of graduate and professional health and human sciences institutions. The first institution to join the system is California's Alliant International University, which specializes in psychology, health sciences and law. Like the other institutions as part of Arist, Alliant -- which has been a private nonprofit university -- will become a public benefit corporation, a form of for-profit company that strives to pursue a social mission.


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