Saturday, December 10, 2005

American InterContinental University faces possible loss of accreditation ::
Burying the lede

Dec. 7--One of Career Education Corp.'s biggest for-profit colleges, American InterContinental University, is in danger of losing its accreditation after a regional evaluation body placed it on probation on Tuesday.

News of the probation sent shares down 11.9 percent, to $34.22, in Nasdaq trading Tuesday. The onetime highflier hit $70 in April 2004.

The Commission on Colleges of the Southern Association of Colleges and Schools, one of eight regional accrediting bodies, has numerous concerns about the school's compliance with broad standards, including the integrity of student academic records and the accuracy of admissions and recruiting practices, said its president, Belle Wheelan.

Wheelan said she did not have details about the problems identified by the commission, known as SACS, because she was travelling after closing the commission's annual meeting in Atlanta on Tuesday. SACS plans to post some of its findings in the matter on its Web site later this week.
. . .
The action taken by SACS deepens the regulatory and legal woes facing Career Education, one of the nation's largest chains of for-profit colleges with more than 80 campuses in the United States and abroad. Such schools have become bigger in recent years by branching out into traditional subjects such as business and law and offering more bachelor's and graduate degrees.
But their growth has been dogged by persistent allegations of fraud.

Pennsylvania, New Jersey and California are investigating the business practices at some Career Education's schools after receiving student complaints about misleading sales practices. The California Bureau for Private Postsecondary and Vocational Education recently concluded that the Career Education's Brooks Institute of Photography had persuaded prospective students to enroll by "willfully misleading" them about their job prospects and earning potential after graduation. As part of its punishment, the school must give an undetermined sum in restitution to students who have attended since 1999. Career Education said it believes the allegations to be false or grossly exaggerated and plans to challenge the findings at a public hearing.

The Department of Education is now investigating the concerns at the company's schools, preventing Career Education from making acquisitions or adding locations until the review is completed. The company also is fighting numerous lawsuits brought by current and former students alleging other misdeeds, such as poor instruction, incompetent faculty and financial-aid fraud.
In the UAE, only American University in Dubai is affiliated with American InterContinental.

UPDATE: The company's press release is here. American Intercontinental's online literature reads "A Real Education From a Real University American InterContinental University is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools to award Associate's, Bachelor's and Master's degrees. For more information visit SACS website"



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