For-Profit Schools Case Study

In 2011 a group of state attorneys led by Jack Conway of Kentucky joined forces wit thirty-six other attorneys to investigate a number of complaints from students who attended or had attended for- profit schools. This has led to federal agencies taking notice of certain problems in the for-profit educational services (Staples, 2014). For-profit schools are drawing intense scrutiny for recruiting aggressively, having high prices, low graduation rates, and having its student borrow heavily while having poor job prospects (Perez-Pena, 2014). Several for-profit educational services are under investigation including Corinthian College, Education Management Corporation, ITT Educational Services and Career Education Corporation (Staples,
Premier is be charged with charging students more than $10,000 for programs lasting less than a year, misleading students about their career prospects, and falsified records to enroll students and keep them enrolled in order to receive government grant and loan dollars (Perez-Pena, 2014). This lawsuit was filed by a former employee, Ms. Amaya, who was an administrator at Harris’s Linwood campus from 2009-2011, along with seven other former employees. Dozens of former Harris students claim that the school lied about what professional certifications they would qualify to sit for after completing their courses; some were told that they would be able to sit for a certification exam that had not been offered in years (Perez-Pena, 2014). Premier Education Group has already settled a similar case to this in the past and case was settled before it went to trial (Perez-Pena,
Department of Education has rewritten the “gainful employment” rule in order to regulate the for-profit institution. The change of the rule was originally blocked in 2012 when the judge ruled that the “Education Department arbitrarily crafted the threshold for determining how well a program’s former students repay their loans” (Stratford, 2015). The regulation was then rewritten and the loan repayment metric was dropped from the rule and it focused on whether a program graduated students with high levels of debt as compared to their earning. A lawsuit was filed by the Association of Proprietary College, which represents for-profit colleges in New Your attempted to block this new rule but the lawsuit was dismissed by U.S. District Judge Lewis Kaplan of New York. The judge ruled that the Education Department had the legal power to create the rule and followed proper procedures in developing the second iteration of the regulation. He rejected the argument that the regulation, which cuts off federal aid to career education programs that graduate students with high debt loans relative their earnings, violated the for-profit schools constitutional right to due process. Donna Stelling-Gurnett, executive director of the Association of Proprietary Colleges, said “While we agreed with the department’s goals for this rule from the outset, we remain steadfast in our conviction that this regulation does not achieve those goals” (Ax, 2015). The for-profit group made