Perdoceo Education Corporation (PRDO) is a private company that currently owns four for-profit universities, including
American Intercontinental University,
Colorado Technical University
Colorado Technical University (CTU) is a private for-profit university with its main campus in Colorado Springs, Colorado. The university is owned by Perdoceo Education Corporation. Founded in 1965, CTU offers undergraduate, graduate, and doctoral ...
,
California Southern University
California Southern University is a private, for-profit, university in Costa Mesa, California. California Southern University is currently a member of the American InterContinental University System. It offers associate's, bachelor's, master's ...
, and
Trident University International
Trident University International is a private for-profit online university based in Cypress, California. It is a member of the American InterContinental University System, and regionally accredited by the Higher Learning Commission.
Trident off ...
. The company was previously known as Career Education Corporation.
History
Career Education was founded in 1994 by John M. Larson
who served as the company's president, CEO and was a member of the board of directors until 2006. Under his leadership, Career Education grew to include over 24 U.S. campuses. On July 1, 2003, Career Education Corporation merged with competitor Whitman Education Group, Inc., gaining control over the latter's
Sanford-Brown Colleges, Ultrasound Diagnostic Schools (now known as the
Sanford-Brown Institute), and
Colorado Technical University
Colorado Technical University (CTU) is a private for-profit university with its main campus in Colorado Springs, Colorado. The university is owned by Perdoceo Education Corporation. Founded in 1965, CTU offers undergraduate, graduate, and doctoral ...
. They also obtained the former Western School of Health and Business.
In the same year, CEC was sued for inflating financial results and issuing misleading statements, violating the
Securities Exchange Act
The Securities Exchange Act of 1934 (also called the Exchange Act, '34 Act, or 1934 Act) (, codified at et seq.) is a law governing the secondary trading of securities (stocks, bonds, and debentures) in the United States of America. A landma ...
.
In March 2007, Gary McCullough joined the company
and served as CEO until November 2011, when Steven H. Lesnik assumed the role of interim president and CEO. Lesnik was the former chairman of the
Illinois State Board of Education
The Illinois State Board of Education (ISBE) administers public education in the state of Illinois. The State Board consists of nine members who are appointed by the Governor with the consent of the Senate. Board members serve four-year terms, wit ...
.
In 2009, Career Education purchased the right to operate
Le Cordon Bleu
Le Cordon Bleu (French for " The Blue Ribbon") is an international network of hospitality and culinary schools teaching French ''haute cuisine''. Its educational focuses are hospitality management, culinary arts, and gastronomy. The instituti ...
schools in the United States and Canada.
In April 2013, Scott Steffey, a veteran of Strayer Education Inc. and former vice chancellor of the State University of New York (SUNY) system, was named as Lesnik's permanent replacement.
According to a 2014 US Senate Health, Education, Labor, and Pensions report, 48% of Career Education's programs would have failed or been at risk of failing the US
Department of Education
An education ministry is a national or subnational government agency politically responsible for education. Various other names are commonly used to identify such agencies, such as Ministry of Education, Department of Education, and Ministry of Pub ...
's new "gainful employment" standards. Until 2015, California Regent Richard Blum (Senator
Dianne Feinstein
Dianne Goldman Berman Feinstein ( ; born Dianne Emiel Goldman; June 22, 1933) is an American politician who serves as the senior United States senator from California, a seat she has held since 1992. A member of the Democratic Party, she was ...
's husband) was a significant shareholder of Career Education stock despite allegations of conflict of interest.
Todd S. Nelson was named CEO of Career Education Corporation in 2015. Nelson was previously the CEO of
Apollo Group
Apollo Education Group, Inc. is an American corporation based in the South Phoenix area of Phoenix, Arizona, with an additional corporate office in Chicago, Illinois.
The company owns and operates several higher-learning institutions, including ...
(parent company of
University of Phoenix
University of Phoenix (UoPX) is a private for-profit university headquartered in Phoenix, Arizona. Founded in 1976, the university confers certificates and degrees at the certificate, associate, bachelor's, master's, and doctoral degree lev ...
) and
Education Management Corporation
Education Management Corporation (EDMC) was a Pittsburgh, Pennsylvania-based operator of for-profit post-secondary educational institutions in the United States and Canada. The company was founded in 1962. At its peak in 2011, Education Manageme ...
(the parent company of the
Art Institutes
The Art Institutes (AI) are a collection of Private college, private For-profit higher education in the United States, for-profit art schools in the United States. Since 2019, the schools have been owned by Education Principle Foundation (ak ...
,
Argosy University
Argosy University was a system of for-profit colleges owned by Dream Center Education Holdings (DCEH), LLC and Education Management Corporation.
On February 27, 2019, the US Department of Education stated that they were cutting off federal fun ...
,
Brown Mackie College
Brown Mackie College was a private for-profit college system in the United States. The colleges offered bachelor's degrees, associate degrees, and certificates in programs including early childhood education, information technology, health sc ...
, and
South University
South University is a private university with its main campus and online operations in Savannah, Georgia, United States. Founded in 1899, South University consists of its School of Pharmacy, College of Nursing and Public Health, College of Healt ...
). The organization closed most of its 50 campuses in the United States as the corporation downsized to two primarily online brands:
American InterContinental University and
Colorado Technical University
Colorado Technical University (CTU) is a private for-profit university with its main campus in Colorado Springs, Colorado. The university is owned by Perdoceo Education Corporation. Founded in 1965, CTU offers undergraduate, graduate, and doctoral ...
. In 2016, Career Education Corporation had about 43,000 students. However, approximately 9,400 students came from schools that were shutting down.
In March 2017, Secretary of Education
Betsy DeVos
Elisabeth Dee DeVos ( ; ' Prince; born January 8, 1958) is an American politician, philanthropist, and former government official who served as the 11th United States secretary of education from 2017 to 2021. DeVos is known for her support for s ...
appointed Robert Eitel, a former Career Education vice president, as an advisor. In March 2019, Career Education Corporation entered into an agreement with
Trident University International
Trident University International is a private for-profit online university based in Cypress, California. It is a member of the American InterContinental University System, and regionally accredited by the Higher Learning Commission.
Trident off ...
, an online for-profit college with approximately 4,000 students, for $35 - $44 million, and merged this acquisition into
American InterContinental University. In September 2019, The Capitol Forum reported that CECO schools "enjoyed an uptick in growth but have declined in quality metrics—spending on instruction, number of dropouts and bad debt all worsened, sometimes dramatically so."
On January 1, 2020, Career Education Corporation officially changed its name to Perdoceo. In March 2020, The Capitol Forum reported that the US Department of Education allowed Perdoceo and its subsidiary AIU to defer $39 million in Title IV money to avoid violating the 90/10 rule.
In 2021, Perdoceo acquired DigitalCrafts for $18.4 million and Hippo Education for $43.3 million. In 2022 Andrew Hurst replaced Todd Nelson as CEO.
The same year, the corporation acquired Southern California University.
Funding
In the 2011 fiscal year, over 95% of Career Education Corporation's funds came from enrolling students whose tuition was paid for by programs sponsored by the US federal government, with about $67 million annually coming from the
US Department of Defense
The United States Department of Defense (DoD, USDOD or DOD) is an executive branch department of the federal government charged with coordinating and supervising all agencies and functions of the government directly related to national secu ...
and
Veterans Administration
The United States Department of Veterans Affairs (VA) is a Cabinet-level executive branch department of the federal government charged with providing life-long healthcare services to eligible military veterans at the 170 VA medical centers and ...
.
Perdoceo and Career Education Corporation schools
*
American InterContinental University (AIU)
*
Briarcliffe College
Briarcliffe College was a private for-profit college with two campuses on Long Island, New York. It was owned by Career Education Corporation. The Bethpage campus served Nassau County, New York, and the Patchogue campus was in Suffolk County, ...
(closed 2018)
*
Brooks College
Brooks College was a for-profit college in Long Beach and Sunnyvale, California. Brooks College closed in 2008 after 35 years.
History
Brooks College had two campuses owned by Career Education Corporation: in Long Beach, California, and in S ...
, Long Beach and Sunnyvale, California (closed, campuses sold in 2007)
*
Brooks Institute
The Brooks Institute was a private for-profit art school in Ventura, California. It was formerly the Brooks Institute of Photography and was originally based in Montecito and Santa Barbara.[Colorado Technical University
Colorado Technical University (CTU) is a private for-profit university with its main campus in Colorado Springs, Colorado. The university is owned by Perdoceo Education Corporation. Founded in 1965, CTU offers undergraduate, graduate, and doctoral ...]
(CTU)
*
Collins College Art and Technical colleges (closed December 2012)
*DigitalCrafts (acquired 2021)
*
Gibbs College
Katharine Gibbs College was a for-profit institution of higher learning based in the United States of America, founded by Katharine Gibbs.
As the Providence School in Rhode Island, it was founded in 1911 as an institution for the career educati ...
School (closed 2008)
*
Harrington College of Design
Harrington College of Design (1931–2015) was a For-profit higher education in the United States, for-profit college in the Chicago Loop, Loop area of Chicago, Illinois, USA, that closed in 2015. It offered students programs leading to either a M ...
(closed 2018)
*Hippo Education (acquired 2021)
*
Le Cordon Bleu
Le Cordon Bleu (French for " The Blue Ribbon") is an international network of hospitality and culinary schools teaching French ''haute cuisine''. Its educational focuses are hospitality management, culinary arts, and gastronomy. The instituti ...
(closed 2017)
*
Missouri College (sold in 2015, closed in 2016)
*
Sanford-Brown Colleges and Institutes (closed 2017)
*
Southern California University Southern California University may refer to:
* California Southern University, a correspondence school founded in 1978 as the "Southern California University for Professional Studies"
* University of Southern California
, mottoeng = "Let who ...
(acquired in 2022)
*
Trident University International
Trident University International is a private for-profit online university based in Cypress, California. It is a member of the American InterContinental University System, and regionally accredited by the Higher Learning Commission.
Trident off ...
(acquired by Career Education Corporation in 2019)
Lawsuits, investigations, and controversies
Career Education was investigated by the
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
for issues of non-compliance in 2005. On February 15, 2005, the company announced an adjustment related to an increase in the estimate for its allowance for doubtful accounts and a restatement for a change in revenue recognition method for its culinary and healthcare externships. In January 2008, CEC reported that the SEC has closed its investigation and will take no action against the company.
A
Department of Justice
A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a v ...
investigation began in 2004 and was terminated in April 2007, with the DOJ declining prosecution.
In June 2005, the U.S. Department of Education prohibited CECO from expanding until it had resolved issues with financial statements and program reviews connected with its
Collins College and Brooks College. In January 2007, the U.S. Department of Education lifted its restrictions on the company opening new schools or acquiring existing ones. Career Education's
American InterContinental University was placed on probation in December 2005 with its accrediting agency,
SACS. The probation status was reviewed after one year, in December 2006, and extended an additional 12 months. On December 11, 2007, CEC announced that SACS has removed AIU's probation and that the university's accreditation remains in good standing.
Brooks College, a Career Education owned school, was the subject of an unfavorable examination of for-profit trade schools in the
CBS news
CBS News is the news division of the American television and radio service CBS. CBS News television programs include the ''CBS Evening News'', ''CBS Mornings'', news magazine programs '' CBS News Sunday Morning'', '' 60 Minutes'', and '' 48 H ...
magazine ''
60 Minutes
''60 Minutes'' is an American television news magazine broadcast on the CBS television network. Debuting in 1968, the program was created by Don Hewitt and Bill Leonard, who chose to set it apart from other news programs by using a unique styl ...
'' which focused on alleged misrepresentations by admission representatives to prospective students. A CBS producer with a hidden camera visited several Career Education schools in the New York area, including the
Katharine Gibbs School
Katharine Gibbs College was a for-profit institution of higher learning based in the United States of America, founded by Katharine Gibbs.
As the Providence School in Rhode Island, it was founded in 1911 as an institution for the career education ...
. In January 2007, the New York State Education Department reported deficiencies at the
Katharine Gibbs School
Katharine Gibbs College was a for-profit institution of higher learning based in the United States of America, founded by Katharine Gibbs.
As the Providence School in Rhode Island, it was founded in 1911 as an institution for the career education ...
's New York campus. The problems related to faculty qualifications and remedial course offerings. Career Education has since closed Katharine Gibbs School's New York campus.
In June of the same year, Career Education announced its plan to close both campuses of Brooks College.
California Culinary Academy, which was purchased by Career Education in 1999, was the subject of an unfavorable article in the ''San Francisco Weekly'' focusing on alleged misrepresentations and omissions made to prospective students to enroll them in the school. According to the ''Chronicle of Higher Education'', a lawsuit was filed over the matter, which resulted in Career Education Corp. paying $10 million in settlement fees.
On November 1, 2011, Career Education's chief executive officer resigned as corporate profits significantly fell and allegations were made involving inflated student placement statistics at its career-oriented schools in New York. Over the year the stock value dropped about 48%.
Steve Lesnik was appointed by the board of directors to serve as the new CEO. Lesnik was a visiting lecturer at Northwestern University and a director of the Illinois Math & Science Academy Foundation.
Several lawsuits were filed by investors who claimed they were defrauded. CEO Gary McCullough was paid nearly $9.8 million in 2011.
In 2013, Career Education Corporation paid $10.25 million to settle the state of New York's claim that the company systematically deceived students by advertising bogus job placement rates. In 2014, Career Education Corporation was under investigation by more than a dozen states Attorneys General, although no charges have been filed by them. The company said it was cooperating fully with the request for information. The ''New York Times'' also reported that if the Obama administration's "gainful employment" proposals were to go into effect, 39% of Career Education's programs would fail student loan debt-to-earnings measurements, making them ineligible for federal funds. In 2015, the US Department of Education reported that Career Education Corporation schools were under ''
heightened cash monitoring
Higher education in the United States is an optional stage of formal learning following secondary education. Higher education is also referred as post-secondary education, third-stage, third-level, or tertiary education. It covers stages 5 to 8 ...
'' because of concerns about their finances or compliance with federal requirements. In 2016, The
Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
requested documents information regarding Career Education's fourth quarter 2014 classification of its
Le Cordon Bleu
Le Cordon Bleu (French for " The Blue Ribbon") is an international network of hospitality and culinary schools teaching French ''haute cuisine''. Its educational focuses are hospitality management, culinary arts, and gastronomy. The instituti ...
campuses. The New Jersey Supreme Court also ruled that
Sanford-Brown students could sue Career Education Corporation despite an arbitration clause in their contracts. The students claimed that they were misled and deceived.
In 2019, Career Education Corp. agreed to forgive $493 million in student debt in a settlement with attorneys general from 48 states and the District of Columbia, closing out a 5-year investigation. The company denied wrongdoing. In September 2019, Perdoceo reached a $30 million settlement with the
Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
over its fraudulent use of
lead generation
In marketing, lead generation () is the initiation of consumer interest or enquiry into products or services of a business. A lead is the contact information and, in some cases, demographic information of a customer who is interested in a spec ...
websites to lure students. In June 2020, an internal employee whistleblower exposed the potentially unethical interference in their job by Diane Auer Jones, currently principal deputy undersecretary at the Education Department. Jones was “vice president of regulatory and external affairs for Career Education Corporation, where she was responsible for companywide regulatory operations, licensure and accreditation, government affairs, among other things, and oversaw the organization's political action committee.” Also in 2020, the Department of Veterans Affairs threatened to cut off funding to Colorado Technical Institute and American Intercontinental University. The Trump Administration, however, sided with the for-profit schools.
Downsizing
In June 2007 Career Education announced that it would close the Brooks College campuses in
Sunnyvale
Sunnyvale () is a city located in the Santa Clara Valley in northwest Santa Clara County in the U.S. state of California.
Sunnyvale lies along the historic El Camino Real and Highway 101 and is bordered by portions of San Jose to the north ...
and
Long Beach, California
Long Beach is a city in Los Angeles County, California. It is the 42nd-most populous city in the United States, with a population of 466,742 as of 2020. A charter city, Long Beach is the seventh-most populous city in California.
Incorporate ...
, and the
Pittsburgh
Pittsburgh ( ) is a city in the Commonwealth (U.S. state), Commonwealth of Pennsylvania, United States, and the county seat of Allegheny County, Pennsylvania, Allegheny County. It is the most populous city in both Allegheny County and Wester ...
branch of the
International Academy of Design and Technology
The International Academy of Design and Technology (IADT) was a private for-profit media arts college in the United States with over ten branches. It was owned by Career Education Corporation. The institution was briefly merged with Sanford-Brown ...
. No new enrollments would be accepted, and the final graduation dates would be September 2008 at the Sunnyvale campus, December 2008 in Pittsburgh, and March 2009 in Long Beach. In February 2008 Career Education Corporation announced that it would phase out operations of nine money-losing colleges, including several
Gibbs College
Katharine Gibbs College was a for-profit institution of higher learning based in the United States of America, founded by Katharine Gibbs.
As the Providence School in Rhode Island, it was founded in 1911 as an institution for the career educati ...
campuses,
Lehigh Valley College
Lehigh Valley College was a college owned by Career Education Corporation, a for-profit educational company. The college was located near Allentown, Pennsylvania, in Center Valley and offered associate degree programs in a variety of vocational a ...
, and
McIntosh College
McIntosh College, founded in 1896, was an educational institution located in Dover, New Hampshire. It granted Associate's degrees and Bachelor's degrees in a variety of vocational areas, including business management, criminal justice, culinar ...
in
New Hampshire
New Hampshire is a U.S. state, state in the New England region of the northeastern United States. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...
and to seek permission to convert two Gibbs college locations to
Sanford-Brown College campuses.
[ On February 18, 2008, CECO's American InterContinental University announced plans to gradually close down its Los Angeles campus. Current students would have the opportunity to complete their programs, but no new students would be enrolled. Dr. George Miller, CEO of American InterContinental University, said "the impact of a two-year probation, coupled with the current market for AIU's programs in Los Angeles, is such that the student population at the campus has decreased significantly, and likely will not reach the sustainable level necessary to support the addition of new programs and necessary resources."
In January 2011, the company announced it would be laying off 600 people. Due to continued declining enrollment, additional plans to lay off as much as 7% of CEC's workforce (900 jobs) and close 23 schools were announced on November 8, 2012. The corporation made the announcement as it reported a $33.1 million net loss for the third quarter of 2012, as well a 23 percent decline in enrollment from a year ago. The '']Chicago Sun Times
The ''Chicago Sun-Times'' is a daily newspaper published in Chicago, Illinois, United States. Since 2022, it is the flagship paper of Chicago Public Media, and has the second largest circulation among Chicago newspapers, after the ''Chicago T ...
'' explained that "a U.S. Senate committee report last summer criticized for-profit schools for focusing on their own profits above their students’ job-readiness and for burdening students with loan debt at taxpayers’ expense. The scrutiny has hurt for-profit college enrollment." 25% of the current faculty at the California Culinary Academy were notified of their termination in mid November, effective December 31, 2012.Year over year, student enrollment dropped 16% from 2012 to 2013.
In 2015, Harrington College of Design
Harrington College of Design (1931–2015) was a For-profit higher education in the United States, for-profit college in the Chicago Loop, Loop area of Chicago, Illinois, USA, that closed in 2015. It offered students programs leading to either a M ...
in Chicago announced a planned closure. Purchased by Career Education Corporation in 1999, the school experienced declining enrollment and closed permanently in August 2018. On May 7, 2015, CECO announced the closure of its 14 remaining Sanford-Brown Colleges. Teach-outs of the remaining students were expected to take at least 18 months, depending on their programs. On December 16, 2015, CECO announced that it would close all 16 Le Cordon Bleu
Le Cordon Bleu (French for " The Blue Ribbon") is an international network of hospitality and culinary schools teaching French ''haute cuisine''. Its educational focuses are hospitality management, culinary arts, and gastronomy. The instituti ...
campuses in the United States. CECO had previously placed the brand up for sale.
See also
* Todd S. Nelson
References
Further reading
*
*
External links
*
{{Authority control, state=expanded
Companies listed on the Nasdaq
Education companies of the United States
American companies established in 1994
Former for-profit universities and colleges in the United States
Companies based in Cook County, Illinois
1994 establishments in Illinois