We bid adieu to another week in the volatile world of proprietary education.
For one for-profit behemoth it has been a topsy-turvy past few weeks. On August 11, 2011 The Wall Street Journal reported that "DeVry Inc.'s (DV) fiscal fourth-quarter earnings rose a better-than-expected 5.1% but showed signs of trouble ahead as new student enrollment dropped sharply."
DeVry is simply experiencing a change that all career colleges are enduring as "gainful employment" regulations begin to bite. Among such constraints are the obligation to ensure students can repay educational loans made them, and that graduates can reasonably expect to be place in jobs.
And controversy continues to roil around the entire proprietary higher-education industry. "The Justice Department and four states have filed a multibillion-dollar fraud suit against the Education Management Corporation, claiming that the for-profit college company was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011," reported The Atlanta Post on August 10, 2011.
Education Management Corporation must answer whistleblowers' accusations that the company uses high-pressure recruitment tactics and presents unrealistically rosy outlooks to prospective students.
Another proprietary-education company hasn't only made unrealistic promises; it has presented falsified job-placement figures. "Illinois-based Career Education Corporation has tentatively agreed ... to pay $40 million to settle a class-action lawsuit involving another of its subsidiaries, the California Culinary Academy in San Francisco," reported California Watch on August 10, 2011. "In that case, former students claimed they had been duped by the college's claim that 97 percent of graduates got jobs in the field."
It appears that a lot of work still needs doing on the ethical front. Career college corporations would be wise to clean up their industry's image, especially if they wish to gain greater legitimacy and acceptance. A significant market segment consisting of people interested in careers in such fields as medical billing and coding and tourism but lacking means sufficient for the traditional postsecondary route look to this sector to meet their needs. It would be a real shame were private-sector colleges and universities to let it down.