Career Education Corporation

Career Education Corporation (CEC) nasdaq|CECO, founded in 1994, is a postsecondary education provider with campus-based and online curriculum. On July 1, 2003, Career Education Corporation merged with competitor Whitman Education Group, Inc., gaining control over the latter's Sanford-Brown Colleges, Ultrasound Diagnostic Schools (now known as the Sanford-Brown Institute), and Colorado Technical Universities.

The organization operates over eighty for-profit college campuses with approximately 90,000 students enrolled.CEC schools include California Culinary Academy, Brown College (Minnesota), the Harrington College of Design, the Brooks Institute of Photography, Brooks College, the Katharine Gibbs Schools, American InterContinental University (AIU), Colorado Technical University, Sanford-Brown Institutes and Sanford-Brown Colleges, Collins College, Lehigh Valley College, Briarcliffe College, International Academy of Design and Technology and Western School of Health and Business Careers.

Schools owned by CEC are located throughout the US, Canada, France, and the United Kingdom. They offer doctoral, master's, bachelor's, and associate's degrees, as well as diploma and certificate programs.

Controversies and federal scrutiny

CEC was investigated by the United States Securities and Exchange Commission [ [http://www.chicagobusiness.com/cgi-bin/news.pl?post_date=2005-12-01&id=18648 "By The Book At Career Education", Chicago Business News, Dec. 05, 2005, By Gregory Meyer] ,] for various issues of non-compliance in 2005. In January 2008, CEO reported that the SEC has closed its investigation and will take no action against the company. [ [http://www.reuters.com/article/governmentFilingsNews/idUSWNAS740220080123 Career Education says SEC ends investigation without action, Reuters January 23, 2008] ] [ [http://chronicle.com/news/article/3796/securities-and-exchange-commission-ends-probe-of-career-education-corp SEC Ends Probe of Career Education Corporation, Chronicle of Higher Education, January 23, 2008] ] [ [http://money.cnn.com/news/newsfeeds/articles/apwire/f50ccca8a19d03d81fc788cb754b4ff5.htm SEC Ends Inquiry Into Career Education, Recommends No Action Be Taken CNN Money, January 23, 2008] ] A Department of Justice investigation began in 1994 [ [http://query.nytimes.com/gst/fullpage.html?res=950DE1DF1031F930A3575AC0A9629C8B63 "Company News; Justice Department Is Investigation Career Education", New York Times, September 3, 2004] ] and was terminated in April 2007, with the DOJ declining prosecution. Another investigation on a different matter was begun by the Civil Division of the DOJ in June 2006 and is currently ongoing. [ [http://digital50.com/news/items/BW/2001/07/14/20070420005152/career-education-corporation-provides-update-on-department-of-justice-investigations.html "Career Education Corporation Provides Update on Department of Justice Investigations", American Digital Networks, April 20, 2007] ]

In June 2005, the U.S. Department of Education prohibited CEC from expanding until it had resolved issues with financial statements and program reviews connected with Collins College and Brooks College two CEC schools. [ [http://www.secinfo.com/d11MXs.v13Vg.htm Career Education Corp · 8-K · For 5/23/06] ] In January 2007, the U.S. Department of Education lifted its restrictions on the company opening new schools or acquiring existing ones. [ [http://www.reuters.com/article/inPlayBriefing/idUSIN20070122070908CECO20070122 Career Education announces the U.S. Department of Education lifts growth restrictions, Reuters, January 22, 2007] ]

CEC's most profitable division, American InterContinental University, was placed on probation in December 2005 with its accrediting agency, SACS. [ [http://www.sacscoc.org/dtails.asp?instid=12550 SACS website, institutional details on AIU] ] The probation status was reviewed after one year, in December 2006, and extended an additional 12 months. [ [http://www.sacscoc.org/disclosure/dec2006/American%20InterContinental%20U.pdf "Disclosure Statement Regarding the Status of American Intercontinental University", Commission on Colleges Southern Association of Colleges and Schools, January 2, 2007] ] On December 11, 2007, CEC announced that SACS has removed AIU's probation and that the university's accreditation remains in good standing. [ [http://www.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20071211005990&newsLang=en "American InterContinental University Announces Positive Result in Accreditation Review] ]

Brooks College, a CEC owned school, was the subject of an unfavorable examination of for-profit trade schools in the CBS news magazine "60 Minutes" which focused on alleged misrepresentations by admission representatives to prospective students. A CBS producer with a hidden camera visited several CEC schools in the New York area, including the Katharine Gibbs School, and uncovered alleged instances of misrepresentations by admissions representatives. [ [http://www.cbsnews.com/stories/2005/01/31/60minutes/main670479.shtml "For-Profit College: Costly Lesson Career Education Corporation"] , CBS News, January 30, 2005] In June 2007, Career Education Corporation announced that it will close both campuses of Brooks College. [http://chronicle.com/news/article/2593/career-education-corp-will-close-3-colleges-it-has-tried-to-sell "Career Education Corp Will Close 3 Colleges It Has Tried to Sell" Chronical of Higher Education, June 29, 2007] ]

In January 2007, the New York State Education Department reported deficiencies at the Katharine Gibbs School's New York campus. The problems related to faculty qualifications and remedial course offerings. New enrollment has been limited and the Education Department has stated it will close the college if improvements are not made. [ [http://www.nytimes.com/2007/01/31/nyregion/31forprofit.html "State Finds Serious Problems at Gibbs School in Manhattan", January 31, 2007, New York Times] ]

California Culinary Academy, which was purchased by CEC in 1999, was the subject of an unfavorable article in the "San Francisco Weekly" focusing on misrepresentations and omissions made to prospective students to enroll them in the school. [ [http://www.sfweekly.com/2007-06-06/news/burnt-chefs/ San Francisco Weekly "Burnt Chefs Former admissions representatives at CCA say they preyed on students’ dreams of becoming celebrity chefs and glossed over the painful economic realities of the industry", Eliza Strickland, June 6, 2007] ] According to the Chronicle of Higher Education, a lawsuit was filed over the matter. ["Lawsuit Accuses Career Education Corp. of Deceiving Students on Program's Quality" [http://chronicle.com/news/index.php?id=3153?=atnb October 1, 2007] ]

Downsizing

After seeking unsuccessfully to sell several of its campuses, in June 2007 Career Education announced that it would close the Brooks College campuses in Sunnyvale and Long Beach, California, and the Pittsburgh branch of the International Academy of Design and Technology. No new enrollments would be accepted, and the final graduation dates would be September 2008 at the Sunnyvale campus, December 2008 in Pittsburgh, and March 2009 in Long Beach. [ [http://chronicle.com/news/article/?id=2593 Career Education Corp. Will Close 3 Colleges It Has Tried to Sell] , "The Chronicle of Higher Education", June 29, 2007]

On February 2008 Career Education Corporation announced that it would also phase out operations of nine money-losing colleges, including several Gibbs College campuses, Lehigh Valley College, and McIntosh College in New Hampshire and to seek permission to convert two Gibbs college locations to Sanford-Brown College campuses.

On February 18, 2008 CEC's American InterContinental University announced plans to gradually close down its Los Angeles campus. Current students would have the opportunity to complete their programs, but no new students would be enrolled. Dr. George Miller, CEO of American InterContinental University, said “the impact of a two-year probation, coupled with the current market for AIU’s programs in Los Angeles, is such that the student population at the campus has decreased significantly, and likely will not reach the sustainable level necessary to support the addition of new programs and necessary resources.” [ [http://www.earthtimes.org/articles/show/american-intercontinental-university-announces-plan-to-teach-out-programs-at-los,284345.shtml American InterContinental University Announces Plan to Teach-Out Programs at Los Angeles Campus] , The Earth Times, 19 Feb 2008]

References

External links

* [http://www.careered.com CEC corporate website]
* [http://select.nytimes.com/gst/abstract.html?res=F30B17FB3F5B0C778EDDAE0894DD404482 "The School That Skipped Ethics Class."] New York Times, July 24, 2005.
* [http://atlanta.creativeloafing.com/gyrobase/Content?oid=oid%3A266315 The student tr
As American InterContinental University fights to keep its accreditation, students on the Buckhead campus wonder if they've received the education they paid for]