Nonprofit Zenith Education Group is consolidating or closing 10 more campuses of the former Corinthian Colleges. The chain lost $100 million last year and is making changes to its business model, curriculum and leadership.
A new study featured in this month's edition of American Economic Review found that employers are less likely to accept a job applicant for a business or health job if they have attended a for-profit online institution than they would an applicant from a nonselective public institution.
The researchers submitted a range of fictitious résumés to companies offering entry-level job openings. Some of the résumés were designed to be identical except for the educational history.
The study found that for business job vacancies that require a bachelor's degree, employers' callback rates differed by more than 20 percent in favor of applicants from public institutions as opposed to for-profits. Employers who are hiring for health jobs that don't require a certificate or license also prefer applicants from public institutions over those from for-profits.
A California judge on Wednesday ordered the defunct Corinthian Colleges to pay $1.17 billion because of what he found to be false advertising and other practices that misled students into enrolling and borrowing money to pay tuition, The Los Angeles Times reported. The ruling came in a suit filed by Kamala D. Harris, the California attorney general. The ruling said Corinthian misled students through false statistics about job placement rates and the unlawful use of U.S. military seals in advertisements, among other practices. The ruling calls for Corinthian to pay $820 million to former students and $350 million in civil penalties. It is unclear how much money Corinthian still has.
The California attorney general last week released thousands of pages of documents in the state's lawsuit against Corinthian Colleges, which collapsed last year. ProPublica analyzed the documents and has now published numerous email messages and documents showing how recruiters for Corinthian enrolled homeless people and helped them borrow money. The students then dropped out quickly and were left with considerable debt. Other documents show that Corinthian recruiters targeted those with low self-esteem.
Baltimore-based Laureate Education announced earlier this week they had reached an agreement with Eurazeo, a European investment company, to sell Glion Institute of Higher Education and Les Roches International School of Hotel Management for $384 million.
Glion is a hospitality business institution with campuses in Switzerland and London that enroll about 2,000 students. Les Roches has campuses in Chicago, Jordan, Shanghai, Switzerland and Spain, which enroll about 2,900 students.
The sale of both institutions is subject to regulatory and accreditor approval.
Linda Katehi, chancellor of the University of California at Davis, lasted only days on the board of the DeVry Education Group. She quit amid criticism for joining the DeVry board while the for-profit education provider was under investigation. Katehi was named to the DeVry board at the same time as another university president, Ann Weaver Hart of the University of Arizona. Initially, there was no controversy over the issue in Arizona.
But now members of the Faculty Senate and others are asking questions and 17 people have submitted complaints about Hart taking the position to the Arizona Board of Regents, The Arizona Daily Star reported. Hart is defending her decision to take the board seat, through which she will earn $70,000 plus $100,000 in stock.
Hart said she plans to work on the board "toward assuring that higher education is available to a segment of Americans who will never be able to attend universities like the University of Arizona."
Historian A. J. Angulo examines the history of for-profit colleges and universities and how many of the problems surrounding these institutions aren't new, but rooted in a past that goes back to the colonial era.
In a victory for the Obama administration, a federal appeals court on Tuesday rejected a challenge by for-profit colleges of the U.S. Department of Education’s gainful employment rule.
The court upheld the administration’s rewritten regulations that are aimed at holding for-profit colleges more accountable for the earnings and loan debt of their graduates.
A three-judge appeals panel sided with a lower court’s ruling that rejected claims by the Association of Private Sector Colleges and Universities that the rule’s debt-to-earnings metrics were arbitrary and lacked congressional authority.
The appeals court again affirmed that the Education Department had the authority to craft the regulations defining gainful employment with a measure of students’ postgraduate earnings and debt. The court wrote that “it would be strange for Congress to loan out money to train students for jobs that were insufficiently remunerative to permit the students to repay their loans.”
A previous lawsuit by the for-profit college association in 2012 led a federal court to strike down key parts of the Obama administration’s original regulations. That sent the administration back to the drawing board to craft new regulations, which went into effect last July.
“When the first gainful employment regulation was struck down by the courts, we expressed hope that the era of overregulation and litigation would give way to a public-private partnership focused on giving Americans the occupational skills they need to succeed in the workforce," Steve Gunderson, APSCU's president and CEO said in a written statement. "We again call on the department to engage with us in finding ways to enhance both quality and opportunity for all students -- especially those seeking employment skills."