The U.S. Justice Department announced last week that it is joining a whistle-blower lawsuit against ATI Enterprises Inc., which owns a chain of for-profit career colleges in Texas. State authorities have already revoked the licenses for some of the programs to operate. The government's complaint alleges that ATI misrepresented job placement statistics in order to keep state approval in place.
Further, the complaint states that that "ATI employees at the three campuses knowingly enrolled students who were ineligible because they did not have high school diplomas or recognized equivalents; falsified high school diplomas, including five Dallas Independent School District diplomas for students who later defaulted on their federal student loans; fraudulently kept students enrolled even though they should have been dropped because they had poor grades or attendance; and made knowing misrepresentations to students about their future employability. The alleged misrepresentations included telling students that a criminal record would not prevent them from getting jobs in their fields of study, quoting higher salaries than the students would be likely to earn and reporting inflated job placement statistics both to the students and the Texas Workforce Commission."
Submitted by Paul Fain on August 28, 2012 - 3:00am
Students who earn associate degrees from for-profit colleges see substantial earnings returns and, in some cases, outperform their peers who hold two-year degrees from community colleges, according to a new research paper from the National Bureau of Economic Research. However, students who drop out of two-year degree tracks at for-profits fare worse in the labor market than do their counterparts at community colleges, found the study, which was authored by Stephanie Riegg Cellini, an assistant professor of public policy at George Washington University, and Latika Chaudhary, an assistant professor of economics at Scripps College.
Submitted by Paul Fain on August 17, 2012 - 3:00am
A newly released poll of influential types, including lawmakers, gave President Obama better marks than Mitt Romney on education policy. The poll, which was conducted by Whiteboard Advisors, an education consulting firm, focused mostly on K-12 issues. However, it found that a Romney administration probably would not seek to substantially revise student aid policies. Respondents also said for-profit colleges should be somewhat concerned about a second term for Obama.
Four years after investors stepped in to stave off the death of Myers University, which has educated adults in Cleveland since the 1850s, the institution -- now called Chancellor University -- once again faces an existential threat, this time at the hands of its regional accreditor. The Higher Learning Commission of the North Central Association of Colleges and Schools voted in late June to put Chancellor on "show cause" status, meaning that the institution will be shut down if its officials cannot persuade the accreditor within a year that it has ameliorated the agency's concerns, which relate to weak finances, conflicts of interest and poor student retention.
It has been a bumpy few years for the institution since 2008, when the Higher Learning Commission granted permission for Myers' buyers (led by the high-profile investor Michael Clifford) to transform it into Chancellor. Clifford had grand plans, including the naming of the institution's management school for Jack Welch, the former head of General Electric. (The management school has since been sold to another for-profit institution, Strayer University.) But it wasn't long before the institution was back in turmoil; in February 2010, the Higher Learning Commission gave it a show cause order, but the commission concluded by February 2011 that the institution had addressed its concerns. But quarterly reports filed by the institution triggered new concerns last February, leading to the new show cause order.
Chancellor University officials told Crain's Cleveland Business that the institution would get through the current crisis as it did two years ago. “Every member of the leadership team and the board of trustees would swear in a court of law, on the Bible and the U.S. Constitution that this institution is significantly better than it was when it got off show-cause” last time, President Robert Daugherty told the newspaper.
Most for-profits operating in California have been deemed ineligible to participate in Cal Grants, the state's generous need-based financial aid program. The California Student Aid Commission on Tuesday released a list of 154 ineligible institutions or branch campuses, 137 of which are for-profits, including the University of Phoenix. The rest are mostly small, private religious institutions. The program's rules were tightened to save money amid California's budget crisis, and were drafted in such a way that they were aimed specifically at for-profits. For example, they apply only to colleges where more than 40 percent of students take out loans. That effectively exempts community colleges, which don't charge enough in tuition for federal loans to be a major issue.
The biggest factor in setting the pay levels of for-profit CEOs is corporate profitability, according to the preliminary findings of an investigation by Rep. Elijah E. Cummings, a Maryland Democrat. Cummings examined the compensation of executives at 13 publicly traded for-profits, asking for documentation on whether the companies linked executive pay to the performance of students. Only three companies provided specific references to how they weigh student achievement in setting compensation, according to a statement from Cummings.