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tatee View Drop Down
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    Posted: Aug 25 2013 at 11:56am

From For Profit Colleges


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Career Education Corp. Reaches $10 Million Settlement In Investigation Of Bogus Job Placements


One of the largest U.S. for-profit college corporations agreed to pay more than $10 million Monday to settle the state of New York's claim that the company systematically deceived students by advertising bogus job placement rates at its career-oriented schools.

New York Attorney General Eric Schneiderman announced a $10.25 million settlement agreement with Career Education Corp., which includes a $1 million penalty and assurances that the school will establish a $9.25 million restitution fund for students who were misled from the 2009-2010 school year to 2011-2012. The company admitted no wrongdoing.

Monday's announcement concludes a more than two-year investigation by the New York Attorney General's office into what it said were misleading advertisements and inflated job placement statistics at Career Education Corp., a Chicago-area company that operates more than 90 college campuses across the world. The company and other for-profit colleges have come under intense government scrutiny in recent years, amid evidence that many students are left with crushing debts and poor job prospects.

According to the findings in Monday's settlement document, Career Education lied to prospective students and to regulators when advertising the percentage of students successfully placed in jobs after graduation -- a marketing technique that allowed the company to boost enrollments and revenues to record highs in recent years. The settlement claims that the company advertised job placement rates of 55 percent to 80 percent at its schools in New York, when the placement rates were actually 24 percent to 64 percent.

The schools included Sanford-Brown Institute, Briarcliffe College and online enrollments through American Intercontinental University and Colorado Technical University, according to the settlement.

Career services employees at the company received bonuses if they could achieve certain job placement rates, creating incentives for employees to cut corners when documenting how many students got jobs after graduation, according to the settlement documents.

For example, some career services employees counted students as being "placed" if they participated in a one-day community health fair, even if they weren't hired by companies at the fair. A criminal justice graduate who worked as a data processor for a company that handled parking ticket data was counted as being employed in that "field" because the graduate dealt "with the courts" when processing parking ticket data, according to the settlement documents.

The settlement alleges that "high-level" career services managers at the company's headquarters "explicitly condoned and even encouraged" such gimmicks to boost placement rates.

By inflating the job numbers, Career Education Corp. avoided scrutiny from outside college accrediting groups, which require schools to meet certain thresholds. Accreditation is a key requirement for colleges to remain eligible to receive federal student loan and grant money -– crucial revenue for the for-profit firms.

The settlement also said that Career Education Corp. failed to tell students that degrees from certain programs would not allow them to take state licensing exams after graduation, significantly hindering a student's ability to get jobs in fields like medical ultrasound.

The job placement scandal has led to significant changes at Career Education Corp. After the New York Attorney General's office issued a subpoena in 2011, the company hired an outside legal firm to audit its career placement office. Auditors found widespread problems, which led to the resignation of the company's chief executive, Gary McCullough, in November 2011, and the firing of 15 career services employees.

McCullough nevertheless received more than $3.6 million in severance.

A spokesman for Career Education Corp., Mark Spencer, wrote in an email Monday that the company was "pleased to have reached a settlement."

"This agreement closes an important chapter and allows us to move forward with a heightened focus on student outcomes," Spencer said. "We remain committed to continually advancing our culture of adherence to legal, regulatory and accreditor requirements, and we're a stronger organization for having addressed these concerns."

In addition to the financial penalties, Career Education Corp. agreed to hire an outside auditor to independently verify all job placement rates for three years at its New York schools and report back to the New York Attorney General's office. The company must provide new disclosures for its New York programs that clearly state job placement rates, and must phase out any New York programs in which degrees do not allow students to take licensing exams after graduation.

The company will provide a list of students who attended certain New York programs from the 2009 through 2012 school years, and they will be eligible to claim money from the $9.5 million settlement fund the company is creating.

The settlement is one of the largest restitution funds created for students allegedly defrauded by a for-profit college. The California Attorney General's Office reached a settlement with Corinthian Colleges Inc. in 2007 that resulted in a $5.8 million restitution fund.

Enrollments at Career Education Corp. schools have plummeted over the last two years, from more than 114,000 at the end of 2010 to 76,000 at the end of last year, according to securities filings.

http://www.huffingtonpost.com/2013/08/19/career-education-corp-settlement_n_3782418.html

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uppitynegroid View Drop Down
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Post Options Post Options   Thanks (5) Thanks(5)   Quote uppitynegroid Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 12:41pm
A lot of mainstream universities are scamming student as well, just in a different way.  I can't tell you how many ivy league graduates I personally know or know of who don't have a pot to piss in and 6 figures of student loans.
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Post Options Post Options   Thanks (1) Thanks(1)   Quote zolloh Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 12:45pm
Sanford-Brown is the one always advertising during Maury and Jerry Springer huh?

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Post Options Post Options   Thanks (0) Thanks(0)   Quote zolloh Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 12:54pm
I was just reading this earlier....these students were quite dumb to believe this LOL

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NY AG sues Trump, 'Trump University,' claims fraud

ALBANY, N.Y. (AP) - New York's attorney general sued Donald Trump for $40 million Saturday, saying the real estate mogul helped run a phony "Trump University" that promised to make students rich but instead steered them into expensive and mostly useless seminars, and even failed to deliver promised apprenticeships.

Trump shot back that the Democrat's lawsuit is false and politically motivated.

Attorney General Eric Schneiderman says many of the 5,000 students who paid up to $35,000 thought they would at least meet Trump but instead all they got was their picture taken in front of a life-size picture of "The Apprentice" TV star.

"Trump University engaged in deception at every stage of consumers' advancement through costly programs and caused real financial harm," Schneiderman said. "Trump University, with Donald Trump's knowledge and participation, relied on Trump's name recognition and celebrity status to take advantage of consumers who believed in the Trump brand."

But Trump's attorney accused Schneiderman of trying to extort campaign contributions from the real estate mogul through his investigation of Trump. Attorney Michael D. Cohen told The Associated Press on Saturday that Schneiderman's lawsuit was filled with falsehoods. Cohen said Trump and his university never defrauded anyone.

He said Trump University provided nearly 11,000 testimonials to Schneiderman from students praising the program and said 98 percent of students in a survey termed the program "excellent."

"The attorney general has been angry because he felt that Mr. Trump and his various companies should have done much more for him in terms of fundraising," Cohen said. "This entire investigation is politically motivated and it is a tremendous waste of taxpayers' money."

State Board of Elections records show Trump has spent more than $136,000 on New York campaigns since 2010. He contributed $12,500 to Schneiderman in October 2010, when Schneiderman was running for attorney general, records show. An outspoken conservative, Trump himself flirted with a presidential run last year.

"Donald Trump will not sit back and be extorted by anyone, including the attorney general," Cohen said.

The lawsuit says many of the wannabe moguls were unable to land even one real estate deal and were left far worse off than before the lessons, facing thousands of dollars in debt for the seminar program once billed as a top quality university with Trump's "hand-picked" instructors.

Schneiderman is suing the program, Trump as the university chairman, and the former president of the university in a case to be handled in state Supreme Court in Manhattan. He accuses them of engaging in persistent fraud, illegal and deceptive conduct and violating federal consumer protection law. The $40 million he seeks is mostly to pay restitution to consumers.

He dismissed Trump's claim of a political motive.

"The fact that he's still brave enough to follow the investigation wherever it may lead speaks to Mr. Schneiderman's character," Schneiderman spokesman Andrew Friedman told AP.

State Education Department officials had told Trump to change the name of his enterprise years ago, saying it lacked a license and didn't meet the legal definitions of a university. In 2011 it was renamed the Trump Entrepreneur Institute, but it has been dogged since by complaints from consumers and a few isolated civil lawsuits claiming it didn't fulfill its advertised claims.

Schneiderman's lawsuit covers complaints dating to 2005 through 2011. Students paid between $1,495 and $35,000 to learn from the Manhattan mogul who wrote the best seller, "Art of the Deal" a decade ago followed by "How to Get Rich" and "Think Like a Billionaire."

Scheiderman said the three-day seminars didn't, as promised, teach consumers everything they needed to know about real estate. The Trump University manual tells instructors not to let consumers "think three days will be enough to make them successful," Schneiderman said.

At the seminars, consumers were told about "Trump Elite" mentorships that cost $10,000 to $35,000. Students were promised individual instruction until they made their first deal. Schneiderman said participants were urged to extend the limit on their credit cards for real estate deals, but then used the credit to pay for the Trump Elite programs. The attorney general said the program also failed to promptly cancel memberships as promised.

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bindy View Drop Down
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Post Options Post Options   Thanks (1) Thanks(1)   Quote bindy Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 1:19pm
5,000 students who paid up to $35,000 thought they would at least meet Trump but instead all they got was their picture taken in front of a life-size picture of "The Apprentice" TV star.LOLLOL
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tatee View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote tatee Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 1:24pm
Ermm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ladycoils Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 1:53pm
This is good.. Now time to sue Strayers.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote miana79 Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 3:30pm
this is good news. Students get taken advantage of to much! 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote miana79 Quote  Post ReplyReply Direct Link To This Post Posted: Aug 25 2013 at 3:35pm
lol@ life Size cut out of trump..
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