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NCLC NATIONALCONSUMERLAWCENTER ensuringeducationalintegrity10 STEPS TO IMPROVE STATEOVERSIGHT OF FOR-PROFIT SCHOOLS Copyright 2014, National Consumer Law Center, Inc.GOVERNMENT INVESTIGATIONSAND LAWSUITS INVOLVINGFOR-PROFIT SCHOOLS1(2004 – MAY 2014) 2014 National Consumer Law Centerwww.nclc.orgEnsuring Educational Integrity, In Their Own Words 5 1
Note: Chart is organized alphabetically by government OR L AWSUIT?CorinthianColleges, Inc.2AGs from AR,AZ, CO, CT, HI,ID, IA, KY, MO,NC, NE, NM,OR, PA, TN, WAITT EducationalServices, Inc.4DATEALLEGATIONS OR ISSUESMulti-stateInvestigation1/2014Organizational information; tuition, loanand scholarship information; lead generationactivities; enrollment qualificationsfor students; complaints; accreditation;completion and placement statistics; graduatecertification and licensing results; studentlending activities.AGS from AR,AZ, CT, ID, IA,KY, MO, NE, NC,OR, PA, TN andWAMulti-stateInvestigation1/2014Marketing and advertising, recruitment,financial aid, academic advising, careerservices, admissions, licensure exam passrates, accreditation, student retention,graduation rates and job placement rates.Career EducationCorp.6AGs from AR,AZ, CT, ID, IA,KY, MO, NE, NC,OR, PA,TN, t practices, graduateemployment statistics, graduate employmentcertification and licensing results, andstudent lending activities.EducationManagementCorporation8AGs from AZ,AR, CT, ID, IA,KY, MO, NE, NC,OR, PA, TN, WA9Multi-stateInvestigation1/2014Practices relating to recruitment, graduateplacement statistics, graduate certificationand licensing results, and student lendingactivities.Ashford University; CA AGBridgepointEducation, Inc.11Investigation1/2013False advertising; false or misleadingstatements during telemarketing calls.Heald College;Everest Colleges;Everest Univ.Online; EverestCollege Phoenix,Inc.; Wyotech;CorinthianColleges, Inc.13CA AGLawsuit10/2013Inflated and misrepresented job placementrates to students and investors, advertisedprograms that it does not offer anddisciplined call center employees whenthey tried to tell prospective students thetruth; unlawfully used military seals inadvertising; and inserted unlawful clausesinto enrollment agreements.Bryman College,Everest Colleges,Nat’l Inst. ofTechnology;CorinthianColleges, Inc.15CA AGLawsuit7/2007Inflation of placement rates; failure todisclose completion rates; overstatingstarting salaries of graduates; failure to meetminimum performance standards.CorinthianColleges, 013(NORAletter)Unlawful acts or practices relating toadvertising, marketing or origination ofprivate student loans. NORA letter statesthat CFPB may seek injunctive and monetaryrelief.2 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Centerwww.nclc.org
OUTCOME ORPENDING(AS OF JUNE 1, 2014)ACCREDITOR(IF ANY )SCHOOLSOFFER ONLINE/DISTANCEPROGRAMS?CREDENTIALS OFFEREDPendingNational—Everest Colleges (ACCSC);Everest Univ. Online (ACICS);Wyotech (ACCSC);Regional—Everest College Phoenix (HLC);Heald (WASC Senior College andUniversity Commission)3Everest Univ.Online; EverestCollege PhoenixCertificates, Associate,Bachelor’s and Master’sDegreesPendingNational (ACICS)5YesAssociate, Bachelor’s andMaster’s DegreesPendingNational—Sanford-Brown. (ACICS);Regional—American InterContinental Univ.(HLC); Briarcliffe College (MSACS);Colorado Technical Univ. (HLC)7YesCertificate, Associate,Bachelor’s, Master’s andDoctoral DegreesPendingNational and regional accreditationat different institutions10YesCertificates, Associate,Bachelor’s, Master’s andDoctoral DegreesPendingRegional(WASC Senior College andUniversity Commission)12YesAssociate, Bachelor’s andMaster’s DegreesPendingNational—Everest Colleges (ACCSC); EverestUniv. Online (ACICS); Wyotech(ACCSC);Regional—Everest College Phoenix (HLC);Heald (WASC Senior College andUniversity Commission)14Everest Univ.Online; EverestCollege PhoenixCertificates, Associate,Bachelor’s, and Master’sDegreesJudgment providing for:(1) 4.3 in restitution;(2) 1.5 in private loancredits; (3) 700,00 forcosts, fees, and UnfairCompetiion Fund; and(4) injunctive relief.16National—Everest Colleges and BrymanColleges (now all Everest Colleges)(ACCSC); Nat’l Inst. of Technology(now Wyotech) (ACCSC)17NoCertificates, Associate, andBachelor’s DegreesPendingNational—Everest Colleges (ACCSC); EverestUniv. Online (ACICS); Wyotech(ACCSC);Regional—Everest College Phoenix (HLC);Heald (WASC Senior College andUniversity Commission)19Everest Univ.Online; EverestCollege PhoenixCertificates, Associate,Bachelor’s and Master’sDegrees 2014 National Consumer Law Centerwww.nclc.orgEnsuring Educational Integrity, In Their Own Words 5 3
Note: Chart is organized alphabetically by government OR L AWSUIT?DATEALLEGATIONS OR ISSUESITT EducationalServices, Inc.20CFPBLawsuit2/2014Misleading representations about accreditationand transferability of credits; aggressivetactics to recruit students and convincethem to take out student loans; and coercingstudents to take out private student loans.Westwood College(Colorado); AltaColleges Inc.22CO AGLawsuit3/2012Misrepresented and inflated job placementrates and graduate employment salaries;misled students about costs of attendance,the terms of institutional financing, and thequality of academic programs; failure todislcose that credits were not transferable;misrepresentations regarding teh costscovered by military benefits.Argosy University;EducationManagementCorporation25CO AGLawsuit12/2013Misrepresented accreditation status of twopsychology doctoral programs and thatprogram would lead to licensure.Apollo Group,Inc.28Dept. ofInvestigationEducation, Officeof InspectorGeneral4/2014Marketing, recruitment, enrollment, financialaid, fraud prevention, student retention andother issues.CorinthianColleges, Inc.30Dept. ofEducationReview2/2014Dept. of Education sought extensivedocumentation on job placement rates andother academic data.DeVryUniversity; DeVry,Inc.32Federal TradeCommissionInvestigation1/2014Investigation as to whether entity is violatingsection 5 of FTC Act. Seeking documentsrelated to advertising, marketing or sale ofsecondary or postsecondary educationalproducts or services or educationalaccreditation products.University ofPhoenix; ApolloGroup, Inc. 34FL AGInvestigation4/2013Misrepresentations regarding financial aidand unfair and deceptive practices regardingrecruitment, enrollment, placement.4 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Centerwww.nclc.org
OUTCOME ORPENDING(AS OF JUNE 1, 2014)ACCREDITOR(IF ANY )SCHOOLSOFFER ONLINE/DISTANCEPROGRAMS?CREDENTIALS OFFEREDPendingNational—ITT Tech (ACICS); Regional—DanielWebster College (NEASC)21YesAssociate, Bachelor’s andMaster’s DegreesConsent Judgmentproviding for:(1) 2.5 million in creditsfor outstanding APEXaccounts; (2) refundsof finance charges forsome APEX accounts;(3) 2 million forpenalties, restitution,costs and fees; and(4) injunctive relief.23National(ACICS or ACCSC)24YesDiplomas, Associate andBachelor’s DegreesConsent Judgmentproviding for:(1) injunctive relief;(2) payment of 3.3million ( 2.870 millionin restitution; 500,000for restitution, attorneyfees and costs, consumereducation and/or futureenforcement at state’sdiscretion; and 1 millionin civil penalties).26Regional(WASC, Senior College andUniversity Commission)27NoAssociate, Bachelor’s,Master’s, and es, Associate,Bachelor’s, Master’s andDoctoral DegreesPendingNational—Everest Colleges (ACCSC); EverestUniv. Online (ACICS); Wyotech(ACCSC);Regional—Everest College Phoenix (HLC);Heald (WASC Senior College andUniversity Commission)31YesCertificates, Associate,Bachelor’s and e, Bachelor’s andMaster’s DegreesPendingRegional(HLC)35YesCertificates, Associate,Bachelor’s, Master’s andDoctoral Degrees 2014 National Consumer Law Centerwww.nclc.orgEnsuring Educational Integrity, In Their Own Words 5 5
Note: Chart is organized alphabetically by government OR L AWSUIT?DATEALLEGATIONS OR ISSUESSanford-BrownInstitute; CareerEducation Corp.36FL AGInvestigation11/2010Possible unfair and deceptive trade practicesand misrepresentations regarding businesspractices.Concorde CareerInstitute; ConcordeCareer Colleges,Inc.38FL AGInvestigation11/2010Misrepresentations regarding financial aidand unfair/deceptive acts re recruitment,enrollment and placement.Argosy University;EducationManagementCorporation40FL AGInvestigation10/2010Potential misrepresentations in recruitment,financial aid and other areas.Keiser University,EvergladesUniversity, KeiserCareer College;Everglades College,Inc.; Bar Education,Inc.42FL AGInvestigation10/2012Misleading or inaccurate information in areassuch as costs, accreditation, transferability ofcredits and federal student loan terms.Kaplan University;Kaplan, Inc.(a subsidiary ofGraham HoldingsCo.)44FL AGInvestigation10/2012Misrepresentations regarding financial aid;unfair/deceptive practices re recruitment,enrollment, placement and graduation rates.MedVance Institute(now Fortis Collegeor Fortis Institute);KIMC Investments,Inc. (now ownedby EducationalAffiliates, Inc.)46FL AGInvestigation6/2012Misrepresentations regarding financialaid, high pressure sales techniques, andunfair practices in recruiting, enrollment,accreditation, job placement and graduationrates.47Ashford University; IA AGBridgepointEducation, Inc.50Investigation5/2014Telemarketers made misleading statementsand used high pressure sales tactics andemotionally charged appeals to pressureprospective students to enroll in on-lineprograms; misrepresented that educationdegree would allow graduates to becomeclassroom teachers when many graduateswould have to meet additional requirementson a state-by-state basis; unfairly imposeda “technology services fee” on all studentsafter 6 weeks of enrollment and retained feeregardless of how long student remainedenrolled; and as a result many students didnot complete programs.6 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Centerwww.nclc.org
OUTCOME ORPENDING(AS OF JUNE 1, 2014)ACCREDITOR(IF ANY )SCHOOLSOFFER ONLINE/DISTANCEPROGRAMS?CREDENTIALS OFFEREDPendingNational(ACICS)37NoCertificates, Associate andBachelor’s DegreesPendingNational(ACCSC)39YesCertificates and AssociateDegreesPendingRegional(WASC Senior College andUniversity Commission)41NoAssociate, Bachelor’s,Master’s and DoctoralDegreesAssurance of VoluntaryCompliance providing for:(1) injunctive relief;(2) retraining of eligiblestudents; (3) 375,000 toscholarship fund;(4) 175,000 in attorneys’fees to AGRegional(SACSCOC)43YesAssociate, Bachelor’s,Master’s and DoctoralDegreesPendingRegional(HLC and NCACS)45YesCertificates, Associate,Bachelor’s and Master’sDegreesAssurance of VoluntaryCompliance providing for:(1) free retraining foreligible students;(2) 600,000 in scholarship donations; and(3) voluntary injunctiverelief.48National(ABHES and COE)49Currently, yes;at time of AVC, no.Diplomas and Associate’sDegreesAssurance of VoluntaryCompliance provides for:(1) 7.25 million inconsumer restitution,fees and costs; and(2) compliance measures.Regional(WASC Senior College andUniversity Commission)51YesAssociate, Bachelor’s andMaster’s Degrees 2014 National Consumer Law Centerwww.nclc.orgEnsuring Educational Integrity, In Their Own Words 5 7
Note: Chart is organized alphabetically by government OR L AWSUIT?DATEALLEGATIONS OR ISSUESWestwood College(Illinois); AltaColleges Inc.52IL AGLawsuit1/2012Misrepresented (1) its criminal justice degreeprogram would qualify students for lawenforcement jobs, when in fact it qualify fewgraduates for such jobs becasue it lackedregional accreditation; (2) that credits fromthe same program were transferable; (3) thatinstitution had or would obtain regionalaccreditation; (4) financial aid, including aboutprivate student loan financing program.CorinthianColleges, Inc.54IL AGInvestigation12/201155Misleading enrollees about post-graduationcareer prospects.DeVry University;DeVry, Inc.57IL AGInvestigation4/2013Payment of incentive compensation torecruiters.Daymar College;Daymar Learning,Inc.59KY AGLawsuit7/2011Deceiving and misleading students abouttextbooks and financial aid, engaging inunlawful restraint on trade, providing falseand misleading information to studentsabout transferability of credits. Complaintalso alleges that some programs do notmeet accreditation standards and thatschool enrolled students who do not meetadmissions criteria.National College;National College ofKentucky, Inc.61KY AGInvestigation12/2010Misleading marketing practices.National College;National College ofKentucky, Inc.63KY AGLawsuit9/2011Providing false, misleading and deceptiveinformation by inflating job placement rates.Spencerian College;The SullivanUniversity, Inc.65KY AGLawsuit1/2013Providing false, misleading and deceptiveinformation about graduation success ratesand by inflating job placement rates.University ofPhoenix; ApolloGroup, Inc.67MA AGInvestigation4/2013Deceptive practices concerning recruitmentand financial aid.8 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Centerwww.nclc.org
OUTCOME ORPENDING(AS OF JUNE 1, 2014)ACCREDITOR(IF ANY )SCHOOLSOFFER ONLINE/DISTANCEPROGRAMS?CREDENTIALS OFFEREDPendingNational(ACICS or ACCSC)53YesDiplomas, Associate andBachelor’s DegreesPendingNational—Everest Colleges (ACCSC); EverestUniv. Online (ACICS); Wyotech(ACCSC);Regional—Everest College Phoenix (HLC);Heald (WASC Senior College andUniversity Commission)56YesCertificates, Associate,Bachelor’s and e, Bachelor’s andMaster’s DegreesPendingNational(ACICS)60YesDiplomas, Associate andBachelor’s DegreesPending.In December 2013, courtordered 1,000/day civilpenalty against schoolretroactive to July 31,2013. In addition, courtordered school’s lawyersto pay 10,000 to KYAG. Court said schoolrepeatedly abused legalsystem to obstruct a validinvestigation.National(ACICS)62YesDiplomas, Associate,Bachelor’s and as, Associate,Bachelor’s and s/Certificates andAssociate DegreesPendingRegional(HLC)68YesCertificates, Associate,Bachelor’s, Master’s andDoctoral Degrees 2014 National Consumer Law Centerwww.nclc.orgEnsuring Educational Integrity, In Their Own Words 5 9
Note: Chart is organized alphabetically by government OR L AWSUIT?DATEALLEGATIONS OR ISSUESCareer EducationCorp.69MA AGInvestigation9/2012Violation of consumer protection lawswith respect to marketing and advertising,job placement and student outcomes,recruitment, and financing of education.Everest s, Inc.71MA AGLawsuit4/2014Allegations of deceptive marketing,high pressure enrollment tactics andmisrepresentations regarding employmentopportunities, graduate earnings, transferability of credits, availability of externships,nature and availability of financial aid,nature and quality of programs, and steeringstudents into subprime loan program.DeVry University;DeVry, Inc.73MA AGInvestigation4/2013False statements relating to state studentloans, guarantees, and grants.New EnglandInstitute ofArt; EducationManagementCorporation75MA AGInvestigation1/2013Marketing, recruiting, and financingpractices.ITT EducationalServices, Inc.77MA AGInvestigation10/2012Requested documents related to financial aid,recruitment, career services, marketing andadvertising, retention and graduation rates.Kaplan CareerInstitute; Kaplan,Inc. (a subsidiary ofGraham HoldingsCo.)79MA AGInvestigation5/2011Recruitment of students and financing ofeducation.Sullivan &Cogliano TrainingCenters; Sullivan &Cogliano TrainingCenters, Inc.81MA AGLawsuit10/2013Deceived and misled the public andprospective students: Misrepresented: the scope, nature, character, and length ofits programs; the success of its students in obtaining jobsin the students’ field of study; the employment opportunities available instudents’ field of study; the assistance school provided in obtainingemployment in students’ field of study’ the availability of internships, together withthe training provided by and employmentopportunities accompanying internships;and the cost of certification tests taken bystudents.Also, misrepresentations to accreditor andto state oversight agency.10 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Centerwww.nclc.org
OUTCOME ORPENDING(AS OF JUNE 1, 2014)ACCREDITOR(IF ANY )SCHOOLSOFFER ONLINE/DISTANCEPROGRAMS?CREDENTIALS OFFEREDPendingNational—Sanford-Brown. (ACICS);Regional—AIU (HLC); Briarcliffe College(MSACS); CTU (HLC)70YesCertificates, Associate,Bachelor’s, Master’s andDoctoral DegreesPendingNational(ACCSC)72YesAssociate, Bachelor’s andMaster’s DegreesPendingRegional(HLC)74YesAssociate, Bachelor’s andMaster’s DegreesPendingRegional(NEASC)76NoCertificates, Associate andBachelor’s DegreesPendingNational(ACICS)78YesAssociate, Bachelor’s andMBA DegreesPendingEach Kaplan Career Institute isnationally accredited by ACCSC,ACICS or COE80YesDiplomas and AssociateDegreesFinal Judgment by Consentwhich provided for:1) Injunctive relief(including shut down of2 programs); and2) Payment of 425,000.82National(COE)NoCertificates 2014 National Consumer Law Centerwww.nclc.orgEnsuring Educational Integrity, In Their Own Words 5 11
Note: Chart is organized alphabetically by government OR L AWSUIT?DATEALLEGATIONS OR ISSUESAmerican CareerInstitute (ACI); TheCareer Institute,LLC83MA AGLawsuit11/2013Falsified documents (enrollment records,attendance records, and student grades)and forged student signatures to maintainaccreditation; enrolled students who didnot meet minimum qualifications (studentswho did not have a high school degree orGED; students who had a criminal recordthat would prevent them from obtainingemployment in the fields being studied);misrepresented graduate job placementrates; and failed to provide students theeducation for which they incurred significantdebts (failed to provide course materialsstudents paid for; not providing skills trainingnecessary for externships/employment); failedto provide refunds upon school closure.Universal TechnicalInstitute; UniversalTechnical Institute,Inc.84MA AGInvestigation12/2012False claims submitted to the state for studentloans, guarantees.CorinthianColleges, Inc.86MN AGInvestigation7/2013Potential issues related to financial aid,admissions, students, and other areas.Herzing University;Herzing, Inc.88MN AGInvestigation11/2013Misrepresentations regarding programmaticaccreditation of Associate in Applied Sciencein Clinical Medical Assisting Program;misrepresentation that same program wouldqualify graduates to take private certificationexam required for employment.Ashford University; NC AGBridgepointEducation, Inc.90Investigation10/2011Whether business practices complied withconsumer protection laws.Kaplan College(Charlotte, NCcampus); Kaplan,Inc. (a subsidiary ofGraham HoldingsCo.)92Investigation1/2012Allegations that students were misled aboutwhether Dental Assistant Program wasaccredited.NC AG and NCCommunityCollege System12 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Centerwww.nclc.org
OUTCOME ORPENDING(AS OF JUNE 1, 2014)ACCREDITOR(IF ANY )SCHOOLSOFFER ONLINE/DISTANCEPROGRAMS?CREDENTIALS verest Colleges (ACCSC
Online; Everest College Phoenix Certificates, Associate, Bachelor’s and Master’s Degrees. 4 5 Ensuring Educational Integrity, In Their Own Words 2014 National Consumer Law Center www.nclc.org SCHOOLS/ OWNERS GOVERNMENT AGENCY INVESTIGATION
