• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

American InterContinental University Faces Possible Loss of Accreditation

Posted on: Wednesday, 7 December 2005, 15:00 CST

By Ameet Sachdev, Chicago Tribune

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.

Probation does not immediately effect American InterContinental's ability to receive government funding or its ability to enroll students. But, the increased scrutiny of the school's practices could harm its recruitment efforts and ability to retain current students. The school has up to two years to address the compliance matters.

"If they don't come into compliance, the next step would be withdrawal of their accreditation," Wheelan said. "If I were the president and my institution were put on probation, I would take it seriously."

George Miller, chief executive officer of Atlanta-based American InterContinental University, said in a prepared statement that the school is "committed to addressing the Commission's concerns while continuing to provide quality education to our students."

A spokeswoman for Hoffman Estates-based Career Education said the company could not comment further because it has not received the specifics about the findings that led to the probation. She added that the company does not expect to receive a formal letter about the findings until the beginning of next year.

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.

The probation spooked investors because it is uncertain whether the accrediting body has concerns with American InterContinental's online division, which has been one of the company's growth engines in recent years. The university, which has seven campuses, began offering online courses in 2001.

Today, about 30 percent of Career Education's students, or about 32,000, are enrolled in online programs, including courses offered by Colorado Technical University Online. The online group accounted for one-third of Career Education's revenue of $1.5 billion in the first nine months of 2005, but two-thirds of its operating profits.

Wheelan said she could not speak specifically about American InterContinental's online division, but she said that one of the commission's concerns about online programs in general is security--how do you ensure that the student who registered for the course is doing the work?

This is not the first time SACS has had questions about American InterContinental. The commission put the school on warning status, the step before probation, in June 2004, after reaffirming its accreditation two years before. The warning was removed in December 2004 after the undisclosed compliance matters were resolved, according to Career Education's federal filings.

But a special committee of SACS visited some campuses in July and had questions about the school's compliance with key standards. It is unknown whether the compliance issues are new or concern older matters.

-----

To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicagotribune.com.

Copyright (c) 2005, Chicago Tribune

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

CECO,

Source: Chicago Tribune

More News in this Category