The Future of For Profit Higher Education: Scrutiny

For-ProfitThe for profit sector of higher education is experiencing significant increases in scrutiny. Given the current debt crisis facing U.S. students and the significant attention profits from the For-Profit-Sector gain in the press it is unlikely to subside soon. Below are a rash of current actions.

Education Department Names Seasoned Team to Monitor Corinthian Colleges

Former Federal Prosecutor Patrick Fitzgerald Will Lead Oversight of Company’s Sale and Wind-Down

The press release stated

…the U.S. Department of Education took additional steps to ensure Corinthian Colleges’ students and the American taxpayer are protected by announcing that Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates, under the leadership of former U.S. Attorney Patrick Fitzgerald, has been selected to take on the role of monitoring various aspects of the career college company. As part of an operating agreement reached earlier this month with Corinthian, the Department required that an independent monitor oversee Corinthian’s actions moving forward as the company begins to sell and wind down its campuses over the coming months.

DeVry under investigation by New York State

DeVry Education Group Inc. said in a corporate filing on Friday that it was under investigation by New York’s attorney general for possible “false advertising and deceptive practices” in its television ads and website marketing. A letter from the state office requested “relevant information from January 1, 2011, to the present,” the company said.

University of Phoenix under review by the U.S. Department of Education

The Apollo Education Group, parent company of the University of Phoenix, disclosed in a corporate filing on Monday that the U.S. Education Department would conduct an “ordinary course program review” of the university’s financial-aid administration and other areas. From the filing, with the Securities and Exchange Commission:

The review, which is scheduled to commence August 4, 2014, initially will cover federal financial aid years 2012-2013 and 2013-2014, as well as compliance with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, the Drug-Free Schools and Communities Act and related regulations.

National College, Kentucky fined for refusal to comply

A Kentucky judge this week affirmed a $147,000 fine against National College, a for-profit institution, over its refusal to comply with a subpoena from the state’s attorney general, the Lexington Herald-Leader reported.

ITT May Face Financial Restrictions

ITT Educational Services Inc. said in a corporate filing on Wednesday that it may face financial restrictions over its failure to file a set of documents with the U.S. Department of Education. A set of financial statements was due to the department by June 30 but was not sent, according to the filing.