Chancellor U. to Shut Down

The embattled Chancellor University will close in August, the Cleveland Plain Dealer reports. Chancellor, a for-profit institution located in Cleveland, enrolled fewer than 250 students earlier this year and planned to drop its regional accreditation in the fall. The university was formed in 2008 when a group of investors, led by Michael Clifford, purchased Myers University, a struggling private nonprofit institution. Chancellor later landed Jack Welch, the former chairman and CEO of General Electric Co., to help run the university's management  school. But Strayer University subsequently purchased the Jack Welch Management Institute.

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Appeals Panel Reinstates False Claims Suit Against ITT

A federal appeals court on Monday reinstated a federal False Claims Act lawsuit brought against ITT Educational Services, Inc. by a former enrollment official. A federal judge in Indiana dismissed the suit against the for-profit higher education provider last year, saying the court did not have jurisdiction because the plaintiffs in the case were not the original source of the allegations against the company, as is required under the false claims law. The court also slapped the plaintiffs with nearly $400,000 in fines for having brought, in the judge's words, a "frivolous" lawsuit.

A unanimous three-judge panel of the U.S. Court of Appeals for the Seventh Circuit sharply disagreed Monday. The appeals panel agreed that the False Claims Act -- in which parties sue companies or others on behalf of the federal government, claiming that the defendants have defrauded the treasury of funds and hoping to be joined by the U.S. Justice Department -- requires a suing party to come forward with allegations that were not previously in the public domain. But the Seventh Circuit court concluded that the charges made by Debra Leveski, the former employee at an ITT campus in Michigan, differed sufficiently from previously disclosed information about the company that the case can appropriately be heard by the federal court.

In directing the lower court to consider the case, and in at least temporarily reversing the financial penalties against her lawyer, the court said: "We do not know whether Leveski will ultimately prevail, nor do we state any opinion as to whether Leveski should ultimately prevail. But we do believe that Leveski should be allowed to litigate her case on the merits, and thus, sanctions for bringing a frivolous lawsuit are inappropriate."

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Aftermath of for-profit fight in Wisconsin

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State's push to rein in for-profit colleges with strict performance standards goes nowhere, but Milwaukee passes a unique ordinance aimed at the industry.

At 265 Colleges, Default Rates Higher Than Grad Rates

An analysis by USA Today has found 265 colleges at which the odds of students defaulting on their loans are greater than the odds of freshmen graduating. Nearly half of the colleges are for-profit institutions, and about one-third are community colleges. However, smaller shares of the students at community colleges borrow, and their loans are smaller, than at for-profit institutions.


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Future Job Seekers Will Need Higher Education

The U.S. economy will create 55 million job openings between now and 2020, according to a new study from Georgetown University's Center on Education and the Workforce. Roughly 65 percent of those jobs will require at least some college credits, the study found. A bachelor's degree will be a minimum requirement for 35 percent of job openings. Given current rates, the economy will face a shortfall of 5 million workers with some higher education.

Ashford Offers Buyouts

Ashford University has begun a voluntary buyout program for non-faculty employees, said a spokeswoman for Bridgepoint Education, which owns the for-profit institution. Enrollment has tumbled at the university, which is also grappling with uncertainty about its regional accreditation. To reduce class sizes, Ashford has hired more faculty members while eliminating all of its teaching assistant positions, according to the company. Next month the Western Association of Schools and Colleges is expected to publicly announce whether Ashford has succeeded in a revised accreditation bid. The university's current regional accreditor is the Higher Learning Commission of the North Central Association of Colleges and Schools.

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Lincoln to Close Five Campuses

Lincoln Educational Services this week announced that it will close five campuses in Ohio and Kentucky. The for-profit institution, which offers automotive technology and other academic programs, said legislation Congress passed last year to eliminate federal aid for "ability to benefit" students had resulted in dramatic enrollment declines at the five locations. That legislation prohibits students who lack a high school diploma or its equivalent from participating in federal aid programs. Shaun McAlmont, Lincoln's CEO, said in a written statement that the company was saddened that those students "continue to be marginalized by legislation that treats them differently than so-called 'traditional' students."

Jury Hits Vatterott College with $13 Million Penalty

A jury in Missouri last week awarded $13 million in damages to a former student of Vatterott College who claimed the for-profit institution had misled her, The Kansas City Star reported. The jury found that Vatterott, which is based in Missouri and owned by a private equity firm, gave inaccurate information about a health care degree program to Jennifer Kerr, a 42-year-old former student. Kerr was awarded $27,000 in actual damages, with the rest of the $13 million being "punitive damages," according to the Kansas City Business Journal. A statement from the college said: "We cannot comment on pending litigation. We are confident at Vatterott that our systems and admission processes are handled professionally. Our mission is to transform and better the lives of our students through quality, career education. We are proud of this mission and will continue to pursue it with professionalism and integrity."

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For-Profits Get Earful from Senator Durbin

Senator Dick Durbin, an Illinois Democrat, was sharply critical of the for-profit sector during a hearing Wednesday of the Senate Appropriations Subcommittee on Defense. The hearing was on the U.S. Department of Defense's tuition assistance program for members of the U.S. military. Durbin, who has tangled with for-profits before, grilled Frederick Vollrath, the assistant secretary of defense for readiness and force management, over the Pentagon's oversight of the program. For-profits received half of the $660 million the federal government spent on military tuition assistance last year. Yet Durbin said only 200 department counselors are on hand to help the 200,000 military students who receive tuition assistance. And he said the department audits only 1 percent of participating colleges each year.

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Big Price Cut for Apollo's Western International

Western International University, a for-profit institution owned by the Apollo Group, has slashed its tuition by 51 percent. The university's bachelor's degrees, which are aimed at working adults, will cost $30,400. Master's degrees will be $11,950. Western, which enrolls 2,500 students, is also offering a "test drive" in which the first two online courses will cost $200 each. Several for-profits have cut prices recently amid slumping enrollments, including ITT Technical Institute and Strayer University.

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