Well, that didn't take long. Only last week, Career Education
But just this morning, the company announced that the Justice Department was giving it detention again, investigating allegations that some of Career Education's schools had submitted false claims or statements to the Education Department. The DOJ also wants information related to compensation for admissions personnel, the use of Pell Grant funds at one school, and student refund calculations at another.
Career Education has more than 80 campuses, more than 100,000 students enrolled, and a $3.2 billion market cap, putting it in second place among for-profit higher education. The much larger Apollo Group
The company, and indeed much of the industry, has been dogged by allegations of misrepresenting graduation and job-placement rates, lowering admission standards, and paying recruiters to get warm bodies in their classrooms. Last year, Apollo was fined $9.8 million for admitting unqualified students to boost enrollment at its University of Phoenix online campus.
Yet while these types of charges have been raised many times over the years, most of the complaints have turned out to be unproven. ITT Educational Services
Still, the industry's continuing legal woes have taken their toll on share prices of some of the industry's main players. But like the academic trajectory of advanced-placement students, some key players continue to excel despite the ennui gripping the rest. ITT, Strayer
Career Education has been able to grow over the years by making a sizeable number of acquisitions, which the Education Department investigation had held back. The company hoped that being cleared of any wrongdoing would let it resume adding schools and students and gaining market share from its competitors. But the Justice Department inquiry, which the company assures us is only "informational in nature," may just put another mark on its permanent file. Further delays can only be bad news for Career Education, and even worse tidings for investors seeking satisfactory returns.
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