September 24, 2021

Career Education gets slammed, CEO resigns

CECOShares of Career Education Corp plunged 42 percent to their lowest in more than 10 years on Wednesday, a day after its chief executive resigned amid findings of improper placement practices, and increased accreditation risks.

The company also reported disappointing quarterly results 10 days ahead of schedule and said the decline in new student sign-ups will not improve in the near term.

At least two brokerages downgraded the stock to their lowest rating citing too many near-term risks.

FORCED EXIT?

Though the company did not tie the placement discrepancies to McCullough’s departure, analysts say he was kicked out for that very issue.

“The compliance issues were probably the main driver behind the CEO resignation,” analyst Dobell said. “An issue with compliance and honesty, particularly given McCullough’s background, was probably more than the board was willing to tolerate and more than McCullough was willing to stand for.”

McCullough was well respected and credited for cleaning up Career Education’s reputation and streamlining its operations, according to Robert W Baird analyst Amy Junker.

 

Professional Academic Society to Offer Graduate Credit by University of St. Thomas for Adjunct Faculty Certification Program

CHICAGO, Ill., August 10, 2009 — SoCAFE, The Society of Certified Adjunct Faculty Educators, announced today that the organization’s certification program for part-time college and university faculty would now be available for graduate credit by the University of St. Thomas, St. Paul, MN.

Completion of the certification course, entitled “Core Competencies of College Teaching” (CTED 672), will earn three graduate hours of credit and award the Certified Adjunct Faculty Educator (C.A.F.E.) designation.

“We’re gratified by the confidence St. Thomas University has shown in the quality of our certification program by offering it for graduate credit. This may be an excellent time for K-12 teachers to consider registering for this course, given the widespread lay-offs of public school teachers around the country,” said Dr. Rochelle Santopoalo, President of SoCAFE.

SoCAFE is the first organization in the United States to provide a portable, national credential for adjunct faculty in American colleges and universities.

Dr. Santopoalo also stated that “while the number of opportunities for K-12 teachers is currently in decline, according to the 2008-2009 edition of U.S. Department of Labor Handbook, the number of college and university teaching jobs is expected to grow by 23 percent between 2006 and 2016 – much faster than the average for all occupations.”

Founded in 1885, the University of St. Thomas is the largest private university in Minnesota. St. Thomas offers bachelor’s degrees in over 85 major fields of study and more than 45 graduate degree programs including master’s, education specialist, juris doctor and doctorates. (University of St. Thomas website: www.stthomas.edu/education/ce).

For more information on the organization visit: http://www.socafe.org.

All trademarks and service marks are the property of The Society of Certified Adjunct Faculty Educators.

Education committee hearing of the U.S. House of Representatives

 If U.S. education officials follow through on their assurances to lawmakers Wednesday, higher-education institutions that participate in federal student aid programs could face a lot more scrutiny in how they enroll students.

 At an education committee hearing of the U.S. House of Representatives, an Education Department official and a government investigator vowed to go after institutions that enroll unprepared students through fraud and abuse. The hearing was held in response to a report, released last month from the General Accounting Office, showing that a few propriety institutions gave students answers to tests so that they would be eligible for Title IV student aid. In other cases, the report said, institutions encouraged students to obtain high school diplomas through diploma mills so the students could secure federal loans.

 Robert Shireman, deputy undersecretary at the U.S. Department of Education, said his office agrees with the report findings. The department is bolstering its communication with other government agencies to help identify illegal activity and revamping how it reviews institutions that participate in federal student aid programs, he said.

 He offered as an example the following: the department now adds and extracts information about consumer complaints from the Federal Trade Commission; the department has created a database that allows student complaints to be referred to law enforcement officials, and the department is using more targeted auditing and investigative techniques to identify suspect institutions.

 “The goal is strengthening the integrity of financial aid programs,” Mr. Shireman said.

 Mary Mitchelson, acting inspector general of the U.S. Department of Education Office of Inspector General, said her office will continue to investigate fraud regarding the tests that determine eligibility for Title IV student aid (referred to as an Ability-to-Benefit or ATB test), and on-line high school diploma mills.

 The hearing took a dramatic turn when George Scott, director of education, workforce and income security issues for the Department of Education, played an audio recording of a test administrator giving students answers to the ATB test. “Mark it ‘C’ on the paper,” the administrator is heard telling students.

 Lawmakers at the hearing expressed concern over the GAO report findings.

 Rep. George Miller, a California Democrat, said the tactics that some institutions use to lure students to federal aid programs reminded him of the deceit that occurred during the recent housing market scandal.

 “It looks a lot like subprime student loans,” he said.

 Other lawmakers urged education officials not to label all proprietary institutions or the students who attend them as disreputable.

 Rep. Brett Guthrie, a Kentucky Republican, praised a proprietary school in his district, Sullivan University.

 “Proprietary schools like Sullivan University have a history of offering quality educations to students in a variety of fields,” he said. “These institutions also have a history of educating underserved populations, including those in rural and urban areas where students have very limited options for job training.”

 Harris Miller, president and CEO of the Career College Association, reiterated that sentiment.

 “Just because we have non-traditional students,” he said “doesn’t mean they’re not successful students.”

 —- Andrea L. Foster

ForProfitEDU.com

House Committee on Education and Labor passed The Student Aid and Fiscal Responsibility Act

The House Committee on Education and Labor passed The Student Aid and Fiscal Responsibility Act (SAFRA) of 2009, H.R. 3221, this included the increase of the 90/10 rule to three years.

Maybe all of the fear mongers hovering over the industry should start to realize there is lots of good and that while some minor changes may come down, there is not much likelihood that any major overhaul will occur.

Apollo & their Cohort Default Issue

Much has been said over the last week regarding apollo and the manner in which they deal with their drops.

A complaint alleges that with regard to students who dropped from their courses shortly after enrolling, University of Phoenix improperly returned the entire amount of the students’ federal loan funds to the lender.  Therfore improperly inflating their default rate.

While I disagree with the practice, I do not believe its a door closer… and it’s not another EVCI

others however are much more bearish.

By far the most bearish viewpoint are:

Citron: http://www.citronresearch.com/index.php/2009/01/15/citron-comments-on-apollo-part-2-revenge-of-the-analysts/

and

Seeking alpha: http://seekingalpha.com/article/114648-apollo-group-s-strong-earnings-are-misleading

What do you think?