For-Profit Career Education Shuts Down Campuses


Career Education, a prominent player in for-profit education, will be closing or selling all of its schools except the two largest: Colorado Technical University and American InterContinental University. 14 campuses and the expansive online program will be closing; Brooks Institute, Briarcliffe College, and Missouri College are to be sold.

Career Education, based in Schaumburg, Illinois, has campuses across the United States with more than 45,000 enrolled students. Its programs offer a variety of degrees and certificates in the fields of Business, Criminal Justice, Culinary Arts, Design, Education, Engineering, Health, Information Technology, and Legal Studies. Most of its students attend online.

American InterContinental University has campuses in Atlanta, Houston, and South Florida, and Colorado Technical University has campuses in Aurora and Colorado Springs.

There will be layoffs, but information about how many of its 7,000 jobs will be lost was not provided. No new students will be accepted to the closing programs from this point on, but its 8,600 affected students will be allowed to complete their studies as the programs are phased out in a process called a “teach-out.” John Lauerman of Bloomberg Business quoted Ron McCray, Career Education’s chairman and interim CEO:

In making this decision, we have chosen a path of gradual discontinuation, or teach-outs, rather than closing schools immediately. Teach-outs minimize potential negative impacts on faculty, students, and staff members.

Career Education and Corinthian Colleges Inc., which also recently declared bankruptcy, both cited government regulation as a reason for their recent actions. McCray summarized the difficult environment Career Education found themselves in:

We believe in the strength of the academic programs at our Career Colleges, but the unfortunate reality is that a more difficult higher-education marketplace and challenging regulatory environment have handicapped our ability to turn these institutions around quickly and operate these programs effectively long-term. Declining student enrollment and financial losses at our Career College campuses, combined with the ‘Gainful Employment’ regulations issued last year, factored into our decision.

Enrollment at for-profit colleges have declined recently due in part to tougher regulation and negative publicity, writes Ameet Sachdev of the Chicago Tribune. The ‘Gainful Employment’ regulations mentioned above were passed in October 2014 and require that graduates of these programs have annual loan payments less than 8% of their total earnings or less than 20% of discretionary earnings.

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