The nation's largest for-profit school, University of Phoenix, is seeking to dismiss a class action lawsuit alleging that the university engages in fraudulent business practices.
As reported by Legal Newsline, the university contends that the lawsuit cannot proceed for reasons including that it alleges fraud based on future events, such as assurance of job placement after graduation, that cannot support a claim.  
According to Legal Newsline:
"Ashley Paredes, a 22-year-old mother of three, is seeking class action status for students who enrolled at the university, borrowed tens of thousands of dollars in federal loans and yet found themselves unemployed with allegedly worthless college credits.
"Paredes enrolled at the University of Phoenix after, she claims, she was promised her associate degree would allow her to continue on to earn her bachelor’s and master’s degrees and work as a licensed counselor.
 "The lawsuit alleges the recruiters for the college promised prospective students that the credits earned at the school would transfer to comparable programs at schools such as California State University."
The case is currently pending in the United States District Court for the Central District of California.

The U.S. Department of Education, in a surprise move, has terminated its contracts with five debt collection companies.  The reason given:  Misleading borrowers at "unacceptably high rates."

As detailed in a recent Huffington Post report, the Education Department said its move was precipitated by  "'high incidences of materially inaccurate representations'to borrowers that it discovered in reviews spanning several months.

The five debt collectors, according to the department, misled borrowers about their options to get out of default, the resulting benefits to their credit reports and collection fees. Misleading borrowers about their defaulted debts may violate federal fair debt collection laws."

"Every company that works for the department must keep consumers’ best interests at the heart of their business practices by giving borrowers clear and accurate guidance," said Education Undersecretary Ted Mitchell. "It is our responsibility -- and our commitment -- to uphold the highest standards of service for America’s student borrowers and consumers."

The debt collection companies affected by the Education Department's actions are: Pioneer Credit Recovery, owned by Navient Corp., the student loan company previously known as Sallie Mae; Coast Professional; Enterprise Recovery Systems; National Recoveries; and West Asset Management.

The Huff Post also reported, "The Education Department said it would transfer accounts from affected companies, including Pioneer, to its other debt collectors, and would officially terminate its relationship with the companies once all accounts have been moved over. The move is the department's most forceful response in years to alleged misdeeds by its student loan contractors."

In the wake of revelations over academic fraud aimed at keeping athletes eligible, University of North Carolina is facing multiple lawsuits over denial of education opportunities.

CNN reports that former basketball player Kenya McBee has joined a putative class action lawsuit filed by former football player Mike McAdoo claiming that the university denied athletes the education to which they were entitled by forcing them to take classes that actually never met.

According to CNN, former basketball player Leah Metcalf and former football player James Arnold filed a separate class action making similar allegation.
An independent investigation launched by the university revealed last fall that academic fraud had been rife at UNC for many years, with officials wrongly denying any involvement within the athletics department.

A whistleblower, Mary Willingham, recently settled a lawsuit relating to her contentions about the university.

Baltimore-based Sojourner-Douglass College has lost its accreditation, with the Middle States Commission on Higher Education upholding its decision to withdraw approval of the school due to financial instability.   The loss of accreditation becomes effective June 30, 2015.
Accreditation is critical in higher education because it allows schools to be eligible for federal financial aid, including Pell grants, and makes it possible for students to transfer credits earned at the institution to some other colleges and universities.
Students with concerns about the impact of the loss of accreditation on them can learn more here about a class action firm that is reviewing these developments.
The Atlantic magazine has published a detailed report on the numerous problems facing the for-profit college industry, stating, "the future  of the for-profit college industry is looking pretty dismal right about now—and that, many would agree, is generally a good thing."

The story states in part: "The vast majority of these institutions’ revenue comes from consumers, many of whom rely on loans and Pell grants. That means the federal government is essentially bankrolling schools that often produce very discouraging outcomes. A 2010 report found that only 22 percent of first- and full-time students pursuing bachelor’s degrees at these institutions in 2008 graduated, compared with 55 percent and 65 percent of students at public and private nonprofit universities, respectively. Meanwhile, nearly three-fourths—72 percent—of the programs offered at for-profit colleges produce graduates who earn less than high school dropouts. And for-profit colleges account for 46 percent of people who entered repayment on their student loans in 2010 and were in default by 2012."

"Much of the scrutiny has centered on the catastrophe surrounding Corinthian Colleges, Inc., once one of the largest for-profit higher-education companies in North America operating some of the best-known vocational-degree institutions, such as Everest and Heald. The beleaguered corporation recently agreed to sell or close dozens of its U.S. campuses as part of a deal with the Department of Education, which last summer froze the institution’s financial-aid payments after it failed to provide the DOE with a series of required records, including job-placement and attendance statistics. And just last week, the Ministry of Education in Ontario announced that it was shutting down the company’s Everest College campuses in the Canadian region, leaving an estimated 2,400 students in limbo."

U.S. Senator Elizabeth Warren (D-Mass.) and Massachusetts Attorney General Maura Healey are among a growing number of national and state leaders urging the U.S. Department of Education to forgive massive student loan debt accrued by former students of Corinthian Colleges, the now-failed for-profit education company.

These leaders claim that Corinthian, through the schools that it operated like Everest Institute, Heald College and Wyotech, engaged in predatory recruitment practices that harmed thousands of working adults now saddled with large debts and no degrees, many of whom were first-generation college students.

 In one letter to U.S. Education Secretary Arne Duncan, Senator Warren and 11 of her colleagues urged the government to utilize its authority "to immediately discharge federal student loans incurred by borrowers who have claims against Corinthian Colleges, Inc."

Mother Jones magazine reports that Senator Warren has devoted considerable energy to the student debt crisis since gaining election in 2012.  

"The first bill she introduced upon her arrival in the Senate in 2013 proposed allowing students to obtain loans at the same low rate the Federal Reserve gives to banks," the magazine writes.  "That bill went nowhere, so the following year Warren returned with a second proposal to allow Americans to refinance their student debt at current interest rate levels. Senate Republicans blocked it. Now Warren is turning to the Department of Education, which, she argues, already has the power to address the problem. The department, which Congress has empowered to administer student loan programs, has broad authority to collect unpaid loans. But in many cases, it also have the authority to reduce or wipe away debts."
A chain of 38 Kaplan College campuses operating throughout the United States is being sold by its owner to Education Corporation of America, an Alabama-based operator of private colleges, according to a news report

Education Corporation of America operates 34 campuses primarily in the Southeast, meaning that the acquisition of the Kaplan colleges would more than double the company's presence around the United States.

More than 12, 500 students are currently enrolled in Kaplan colleges, according to the report.

Kaplan University, a separate school, is not part of the transaction.
A recent study by a Wisconsin state agency reveals that about one-third of all students enrolled at for-profit and online colleges in Wisconsin do not make it to the second year of instruction.

The report, which was highlighted in a story in the Wisconsin State Journal, found that 30 percent of students who started at a group of 213 for-profit and online schools overseen by the state's Educational Approval Board had dropped out before the second year of instruction.

According to the Wisconsin State Journal story,  the for-profit school industry "has been widely criticized in recent years, coming under congressional scrutiny and seeing numerous individual schools sued by state attorneys general for practices including inflated promises about job placement and overly aggressive marketing tactics."

File Size: 58 kb
File Type: pdf
Download File

Wilbeforce University, the nation's oldest private historically black institution of higher education, is facing a show-cause order from the Higher Learning Commission, but it is actively investing in buildings and academic programs as it fights the challenge to its accreditation.
In June 2014, the Higher Learning Commission issued a show-cause order alleging that the university was not in compliance with several areas important to its accreditation, including academic programs, finances, and physical plant.
In addition to undertaking repairs to buildings and shoring up academic programs, Wilberforce has submitted a 3,000 page document to the commission describing its plans for improvement.
A site visit by the HLC  that is part of the show-cause order is now scheduled for April 2015.  The visit will give Wilbeforce an opportunity to show that its accreditation should not be revoked, a move that could be devastating the university, its faculty, and its students.

Norfolk State University is facing questions about its future following a decision by its accrediting agency to place it on probation.
According to media reports, the Southern Association of Colleges and Schools placed the four-year university with approximately 6,000 students on probation in December 2014, following a period of being in warning status.  
As reported by Norfolk ABC affiliate 13 NewsNow,  "If Norfolk State University's accreditation is stripped away, it loses all access to federal funding and student aid. NSU would also lose its standing in the higher education community, meaning no one will accept NSU students as transfers."  
The university has been placed on probation by SACS for compliance issues relating to governance, faculty qualifications, financial stability and control over sponsored research.  SACS currently accredits colleges and universities in 11 states.
A site visit by the accrediting agency currently is planned for September 2015. 
Interim Norfolk State President Eddie Moore Jr. has publicly said that while he is disappointed by the accrediting agency's decision, the university currently expects no academic or financial impact due to probation.
Students and others with concerns about Norfolk State's accreditation who wish
to share those concerns with attorneys at College Watchdogs can do so here or by sending an e-mail to