May 15, 2023

Collapsed Career College Chain CEHE Loses at Colorado Supreme Court

Collapsed Career College Chain CEHE Loses at Colorado Supreme Court

The demised career college operation Center for Excellence in Higher Education, which ran Independence University and other schools, lost on nearly every issue today in a decision issued by the Colorado Supreme Court. The state high court unanimously rebuffed CEHE’s demand for a new trial of a case brought by the Colorado attorney general. In that case, a state trial judge in August 2020 found CEHE and its executives liable for $3 million for deceiving students about matters including graduation rates and graduate starting salaries. 

Eight months after that 2020 court verdict, CEHE’s accreditor, ACCSC, withdrew approval of the schools. Soon after, the U.S. Department of Education suspended CEHE’s CEO, Eric Juhlin, from federal contracting, and tightened conditions on federal student aid to the schools.  By August 2021, the schools closed down.

CEHE has repeatedly claimed the Colorado AG’s case is somehow politically motivated, rather than an effort to protect students from predatory recruiting and high-priced, low-quality programs. The schools’ founder Carl Barney, who converted his schools from for-profit to non-profit in a troubling deal that allowed him to continue making millions off the operation, recently charged on his grievance-heavy blog that the case brought by the Colorado AG against his schools was a “horror story of government corruption,” and “a multi-agency collusion to put schools out of business” — a supposed plot that involved not only a senior assistant Colorado attorney general, but also the executive director of accreditor ACCSC, officials of the U.S. Department of Eduction, and “the cabal of progressive haters of private colleges (David Halperin, Robert Shireman, entities funded by Arnold Ventures, Sen. Elizabeth Warren, and Sen. Richard Durbin).” 

The state’s Supreme Court, reviewing a decision of the state’s court of appeals, rejected, as did the lower courts, CEHE’s claim that it was entitled to a jury trial in the case. It also, crucially, reversed the court of appeals’ judgment that a complete retrial of the case was required to address one narrow issue in the case — whether CEHE’s abuses against students had a significant impact on the public — and instead directed the lower court to revisit that issue. (That approach always made sense to me.)  Finally, it upheld the court of appeals’ decision, urged by CEHE, that CEHE’s private student loan program was “not unconscionable,” but even there the court today rejected the legal standard announced by the appellate judges. And the Supreme Court’s decision on this third point did nothing to upset the $3 million judgment against CEHE. 

Now I guess Carl Barney can add the Colorado Supreme Court to his list of conspirators.