February 9, 2016
quadIHE

Who Owns the Colleges The Obama Administration Just Shut Down?

Last week the U.S. Department of Education took the rare step of cutting off federal student aid to two for-profit college chains, each accused of deceiving the Department and their own students. The allegations against the schools, while similar to abuses exposed at other schools in the past, are startling. But what’s also interesting is the ownership of the two chains: While one chain is a long-time family-owned and run operation, the other has been partly owned since 2004 by a well-connected New York private equity firm, Quad Partners, that includes former New Jersey Governor Thomas H. …

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February 9, 2016
westwood

Education Dept. Sent Corinthian Students to Westwood. Now Westwood Is Closing …

Last spring, when for-profit Corinthian Colleges abruptly shut down under the weight of allegations of deceptive acts, Corinthian students had a choice under U.S. Department of Education rules: transfer to another school, or receive a “closed school discharge,” which would free them from the obligation of repaying the student loans they had incurred at the school. The Department seemed to be steering Corinthian’s students toward the transfer option. That may have been because forgiving the loans of all those Corinthian students would have created an enormous expense for taxpayers — perhaps hundreds of millions of dollars.

But because many …

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February 8, 2016
phoenixad

University of Phoenix: New Boss, Same as Old?

Today, the University of Phoenix’s owner, Apollo Education Group, announced a $1.1 billion deal to be acquired by a consortium of investors including Apollo Global Management (no relation) and the Vistria Group, a private equity firm that includes Tony Miller, who was Deputy Secretary of Education under President Obama from 2009-2013. Miller would become Chairman of the Apollo Education Group Board. Would this be a good deal for America’s students and taxpayers?

The University of Phoenix, by far the largest for-profit college, has seen a dramatic decline in enrollments and revenues in recent years, as the public has become aware of …

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February 8, 2016
trace1

Credit Suisse Analyst Who Touts DeVry Previously Touted Corinthian

Credit Suisse got the attention of Wall Street last week when it issued a report recommending that investors buy shares in one of the largest for-profit college companies, DeVry Education Group. The report came less than a week after the Federal Trade Commission sued DeVry for allegedly misleading students about job placement rates and salaries for the school’s graduates, with damages potentially reaching $8.6 billion.

The Credit Suisse analyst note, issued last Tuesday, told investors that DeVry shares were worth $29 — more than 50 percent higher than the trading value that day. On Wednesday, the stock closed up by 9.73% …

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February 5, 2016
ITTbldg

ITT Tech, Settling Shareholder Suits, Pledges Reforms

Last week, troubled for-profit college company ITT Tech settled a series of lawsuits brought by shareholders that charged ITT with various securities law violations.  Under the agreement, approved preliminarily by Manhattan federal judge J. Paul Oetken on Jan. 29 but still subject to objections by investors, ITT will pay lawyers for the plaintiffs $1.1 million and commit to a series of “corporate governance reforms,” including ITT commitments that:

Two-thirds of the ITT board of directors will be independent.
Bonuses and separation agreements will take into account executives’ compliance with the law.
ITT will publicly disclose its insider trading policy.
ITT will adopt a “Clawback and …Continue Reading »

February 1, 2016
militaryquinst

Military-Branded Websites Push Veterans to Troubled For-Profit Colleges

In a well-publicized 2012 action, the attorneys general of 20 U.S. states stopped a company called QuinStreet from using a military-branded website, GIBill.com, to steer American veterans to controversial for-profit colleges. But it turns out that marketers, including QuinStreet itself, have continued to engage in similar practices since then.

Websites such as Military.com and GIJobs.com still push vets and military service members to schools including ITT Tech, Kaplan, and Education Management Corp.’s (EDMC) Art Institutes — institutions that often charge students sky-high prices, spend too little on instruction, and leave dropouts and graduates alike without the careers they sought and buried …

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January 21, 2016
ITTbldg

Blockbuster Lawsuit Claims Abusive Practices Persist at ITT Tech

A federal whistleblower lawsuit against troubled ITT Tech, unsealed last week, reads like a greatest hits of abuses by America’s predatory for-profit colleges.  The suit alleges that ITT has repeatedly defrauded taxpayers by taking billions of dollars in federal student aid while systematically deceiving students and violating federal regulations.

The complaint, first described today by MarketWatch, was filed last April in federal court in Tallahassee, Florida, by Rodney Lipscomb, who served as the dean of academic affairs at ITT’s Tallahassee campus from 2011 until early 2015. The case was unsealed on January 15 after the U.S. Justice Department declined to join …

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January 14, 2016
power

Huge Powerball Jackpot Is Less Than Taxpayers Give Yearly To Controversial For-Profit Colleges

The unprecedented Powerball jackpot is supposed to bestow extraordinary riches upon the long-awaited winners. But did you know that each of the three winners will receive less over a 29-year payout than ten U.S. for-profit college companies receive from your tax dollars every single year?  Worse, seven of those ten colleges have been under investigation in recent years by federal and state law enforcement agencies for deceiving their students, lying to government regulators, and other abuses.

The Powerball jackpot will be divided among three winning tickets bought in Tennessee, California and Florida, and each ticket is worth $528.8 million, paid out in installments until …

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