Submitted by Paul Fain on January 18, 2016 - 3:00am
The U.S. Department of Defense on Friday removed the University of Phoenix from probationary status, allowing the for-profit chain to again be eligible to participate in a tuition assistance program for active-duty members of the U.S. military.
The sanction, which the Pentagon handed down last October, was related to allegations of improper recruiting of service members. The Pentagon also cited investigations of the university by the U.S. Federal Trade Commission and California's attorney general. As a result, Phoenix, which said at the time that it had fixed military-recruiting compliance issues, was barred from recruiting on military bases or enrolling students who received military tuition assistance.
"The department determined that the removal of probationary status was warranted based on the department's internal review, the university's response to the department's concerns as set forth in multiple potential noncompliance notifications including the department's letter dated Oct. 7, 2015, the active engagement and cooperation by representatives of the University of Phoenix, and other relevant materials," said a Defense Department official in a written statement.
Several Senate Republicans, including Arizona Senator John McCain, had complained about the sanction. McCain called the news last week a "victory for due process and basic fairness."
Apollo Education Group’s board announced today that the company is exploring a potential change in control of the company. Apollo is the parent company of the University of Phoenix.
“The board believes that these actions will support and accelerate Apollo’s strategic initiatives, which include the continued growth and investment in Apollo Global and the continuation of the University of Phoenix’s transformation plan to further enhance student outcomes and provide outstanding, career-relevant higher education for working adults,” a news release from the company said.
The company has been shrinking. Corporate filings released today revealed Apollo’s first-quarter revenue is down to $586 million compared to $714.5 million a year ago. Enrollment also continues to decline. Total enrollment is at about 201,000 students compared to about 267,000 last year.
Apollo also reported that in August the Federal Trade Commission had launched an inquiry into Phoenix's "practices and procedures for safeguarding student and staff personal information." That inquiry is separate from the FTC's civil investigative demand in July that relates to an investigation into allegations of deceptive or unfair advertising, marketing, or product or service sales. According to the filing, the August inquiry was closed without any "adverse action."
Submitted by Paul Fain on January 5, 2016 - 3:00am
The Association of Private Sector Colleges and Universities on Monday wrote to John King, the acting U.S. secretary of education, to request a "constructive collaboration" between the for-profit sector and the department during the Obama administration's final year. Steve Gunderson, the group's president and CEO, asked King to work with for-profits in the run-up to the reauthorization of the Higher Education Act, which is the law that governs federal financial aid.
"A new year, and new leadership at the department, brings opportunities for new beginnings. My hope is that together we can begin an era of constructive collaboration that never forgets our common mission in serving the students enrolled in our sector's schools. Unfortunately, the past six years have been marked by an era of ideological confrontation where nobody wins -- especially the students," Gunderson wrote.
In the letter Gunderson pointed to steep enrollment declines many for-profits have experienced in recent years, noting that the sector enrolled 562,000 fewer students in 2014 than it did four years earlier. However, he also said for-profits issued more credentials in 2014 than they did during the height of the recession. And Gunderson criticized the department for its aggressive scrutiny of for-profits.
"As much as I am a fan of all sectors of higher education, I believe that no sector could survive the level of investigations and attacks that have been directed to our schools in recent years," he wrote.
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."