Career Education Corporation (CEC) (NASDAQ: CECO), a global provider of
post-secondary education programs and services, today announced that the
Accrediting Commission of Career Schools and Colleges (ACCSC) voted to
direct 10 Career Education institutions to show cause as to why their
accreditation should not be withdrawn. The action stems from the
accreditor’s ongoing information requests regarding student placement
determination practices at these institutions.
CEC last month announced that the Accrediting Council of Independent
Colleges and Schools (ACICS) lifted its similar “show cause” directive,
which also centered on student placement determination practices. Much
of the material requested by ACCSC overlaps with the information
provided earlier to ACICS. Nine of the ten schools identified are dually
accredited by ACCSC and ACICS. These schools were included in the prior
directive by ACICS, which after reviewing the company’s actions and
reforms regarding student placements vacated the show cause.
“We have been in ongoing communication and correspondence with ACCSC
since we self-reported last year regarding student placements,” said
Steven H. Lesnik, chairman, president and chief executive officer of
CEC. “We maintain an open dialogue with ACCSC and intend to continue
working directly with the accreditor towards a quick resolution.”
ACCSC set forth requirements for the institutions to demonstrate
compliance with its accrediting standards, which include the submission
of 2012 ACCSC employment placement rate data for each program offered at
the ten institutions; engagement of an independent third-party to audit
100 percent of this employment placement rate data; additional analysis
of previously submitted placement data; and an update regarding related
regulatory inquiries. The company must provide this information to ACCSC
no later than Sept. 7, 2012.
Last year, CEC discovered and reported issues it identified regarding
the adequacy of administrative practices and controls relative to its
schools’ determination of student placement rates. As a result, the
company has taken a number of significant and previously reported steps
in addressing placement determination practices, including:
-
Investigating and reviewing its placement practices through an
independent outside counsel appointed by the Board of Directors;
-
Setting new comprehensive placement guidelines to determine and
clarify what constitutes and is reported to accreditors as a student
placement;
-
Verifying all student placements through a third party before they are
reported; and
-
Hiring more than 75 additional Career Service staff in schools
accredited by ACCSC and ACICS to assist students in finding
employment, while enhancing training, competencies and
accountabilities for Career Services representatives.
The ACCSC action involves: Sanford Brown Institutes in Pittsburgh, Pa.;
Brown College campuses in Mendota Heights and Brooklyn Center, Minn.; Le
Cordon Bleu institutions in Pittsburgh, Pa., Las Vegas, Nev.,
Scottsdale, Ariz., Miramar, Fla., and Cambridge, Mass.; and California
Culinary Academy in San Francisco, Calif.
CEO Lesnik added: “I am absolutely confident that our leadership team
and the entire organization are fully committed to accuracy and
accountability – and to diligently and effectively supporting our
students’ career opportunities. We look forward to working with ACCSC to
convey our actions and commitment and to resolving this matter
satisfactorily.”
About Career Education Corporation
The colleges, schools and universities that are part of the Career
Education Corporation ("CEC") family offer high-quality education to a
diverse population of approximately 95,000 students across the world in
a variety of career-oriented disciplines through online, on-ground and
hybrid learning program offerings. The more than 90 campuses that serve
these students are located throughout the United States and in France,
the United Kingdom and Monaco, and offer doctoral, master's, bachelor's
and associate degrees and diploma and certificate programs.
CEC is an industry leader whose institutions are recognized globally.
Those institutions include, among others, American InterContinental
University ("AIU"); Brooks Institute; Colorado Technical University
("CTU"); Harrington College of Design; INSEEC Group ("INSEEC") Schools;
International University of Monaco ("IUM"); International Academy of
Design & Technology ("IADT"); Le Cordon Bleu North America ("LCB"); and
Sanford-Brown Institutes and Colleges. Through its schools, CEC is
committed to providing high-quality education, enabling students to
graduate and pursue rewarding career opportunities.
For more information, see CEC's website at www.careered.com.
The website includes a detailed listing of individual campus locations
and web links to CEC's colleges, schools, and universities.
Except for the historical and present factual information contained
herein, the matters set forth in this release, including statements
identified by words such as “intend,” “anticipate,” “look forward to,”
“believe,” “plan,” “expect,” “will,” “potential” and similar
expressions, are forward-looking statements as defined in Section 21E of
the Securities Exchange Act of 1934, as amended. These statements are
based on information currently available to us and are subject to
various assumptions, risks, uncertainties and other factors that could
cause our results of operations, financial condition, cash flows,
performance, business prospects and opportunities to differ materially
from those expressed in, or implied by, these statements. Except as
expressly required by the federal securities laws, we undertake no
obligation to update or revise such factors or any of the
forward-looking statements contained herein to reflect future events,
developments or changed circumstances, or for any other reason. These
risks and uncertainties, the outcomes of which could materially and
adversely affect our financial condition and operations, include, but
are not limited to, the following: our continued compliance with and
eligibility to participate in Title IV Programs under the Higher
Education Act of 1965, as amended, and the regulations thereunder
(including the “90-10 Rule” and gainful employment regulations), as well
as regional and national accreditation standards and state regulatory
requirements; our ability to obtain accrediting agency approvals for
existing or new programs and to successfully defend litigation and other
claims brought against us; rulemaking by the U.S. Department of
Education and increased focus by the U.S. Congress and governmental
agencies on for-profit education institutions; and changes in the
overall U.S. or global economy. Further information about these and
other relevant risks and uncertainties may be found in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2011
and its subsequent filings with the Securities and Exchange Commission.
