Low job placement rates puts for-profits at risk

New figures show two California campuses owned by for-profit education firm Career Education Corp. appear to have placed fewer than 65 percent of graduates in jobs – the minimum job placement rate required by the Accrediting Council for Independent Colleges and Schools, California Watch reports. And while Career Education officials disclosed earlier this month that job placement rates at 36 of 49 health education and art and design schools had fallen below the minimum required by the accrediting agency, the new data show that as many as 45 of the campuses may have missed the mark.

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For-profit college company denies US recruitment lawsuit

Education Management could face a hefty settlement.

A large for-profit education company has asked a judge to throw out a Department of Justice lawsuit that claims it used improper sales tactics to lure unqualified students and the billions of dollars in financial aid they bring.

Education Management Corp. runs more than 100 higher-education programs across the country, offering diplomas and degrees in fashion, culinary arts, business and other fields, some through online courses.

A whistleblower lawsuit backed this year by the Department of Justice accuses the company of paying illegal incentives to recruiters to sign up students, in violation of a 1992 law that bans such practices.…Read More

Plan to outsource online classes to for-profit schools meets opposition

Some Nevada college officials oppose the creation of a new virtual school.

Members of a Nevada higher-education task force are pushing for a virtual college that would farm out community college courses to for-profit institutions, drawing criticism from educators who say the proposal constitutes privatization of public education and a lowering of academic standards.

In a report released in August by a task force created by the Nevada System of Higher Education (NSHE), officials introduced a range of reforms for Nevada’s four community colleges, with one suggestion grabbing national attention: establishing a new institution, the Nevada Virtual College (NVC), and hiring a for-profit school to “develop and deliver curriculum” to students.

The statewide proposal comes after several years of negative headlines and government reports showing how for-profit college students leave school with far more loan debt than their counterparts at traditional colleges, along with questionable recruiting tactics by some of the best-known for-profit schools, all with vast online programs.…Read More

For-profit college default rate spikes; industry hits back

Some for-profit colleges have default rates of more than 25 percent.

Colleges and universities of every kind have seen student loan default rates jump this year, with for-profit schools that have recently come under government scrutiny recording the sharpest increase in defaults.

For-profit colleges and the industry’s lobbyist groups criticized a new report from the U.S. Department of Education (ED), released Sept. 12, that showed 15 percent of for-profit college students have defaulted on their school loans, marking a four-percent increase.

The report focuses on students who should have begun repaying their academic loans in 2009. Overall, the national student loan default rate rose from 7 percent to 8.8 percent.…Read More

Integrity of ED’s for-profit college rulemaking under scrutiny

Sen. Charles Grassley, R-Iowa, wrote a letter to Education Secretary Arne Duncan in late July, questioning the lack of set rules regarding the department’s contact with Wall Street.

Did Wall Street traders influence the development of new rules governing for-profit colleges, or benefit from inside information about these rules before it became public? Those are questions at the center of an investigation by the Education Department’s (ED’s) inspector general and a separate inquiry by Sen. Charles Grassley, R-Iowa.

The investigations were prompted by the release of several eMail messages exchanged between department employees and Wall Street traders. Government watchdog groups obtained the messages under Freedom of Information Act requests.

The probes could cast a dark cloud over ED’s efforts to crack down on predatory student recruiting practices by for-profit colleges, calling into question the department’s true motives. Aside from whether education officials acted appropriately, the flap also raises larger questions about “the integrity of government decision-making in the face of relentless Wall Street scrutiny,” the Project on Government Oversight (POGO) says.…Read More

Are for-profit colleges hurting online education’s reputation?

For-profit colleges account for about half of student loan defaults.

Congressional hearings and a barrage of criticism have put for-profit colleges on the defensive, and with many of the sector’s largest schools touting vast web-based course options, those who track the industry say for-profit programs could damage the public perception of online education.

Lawmakers from both major parties have defended the for-profit industry’s business practices, but Sen. Tom Harkin (D-Iowa) has remained one of the most vocal—and active—critics of for-profit colleges’ recruitment and student loan practices.

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Liberal activists: For-profit colleges ‘ripping off’ students, taxpayers

About 1,000 young people attended the annual Campus Progress conference.

In a speech at the Campus Progress National Conference July 6, an official from a left-leaning think tank condemned for-profit colleges—many of which are the nation’s largest online education providers—as ineffective and financially crippling for students.

Campus Progress, the youth branch of the Center for American Progress, a progressive think tank based in Washington, D.C., held its annual conference last week.

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