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Out of the Frying Pan, Into a Load of Debt

December 11, 2009

Diploma mill Career Education Corp (CEC) has been hit with a class-action lawsuit by former students at its Portland-based Western Culinary Institute. The students allege that the pricey school saddled them high-interest loans while offering poor training that qualified students for nothing more than low-paying, entry –level kitchen jobs.

Other CEC culinary schools have also been under fire. A June 2007 expose in the San Francisco Weekly noted the changes at the company’s California Culinary Academy (CCA) after the Career Education Corp takeover. Two years after buying the school, enrollment more than quadrupled, jumping from 442 to 1,868. With high-interest loans for the nearly $50,000 in tuition for the 15-month program, some former students face a debt of more than $100,000 on graduation, yet most are qualified for little more than $10 an hour kitchen staff wages.

Two former CCA admissions reps told the Weekly that CEC imposed a high pressure sales approach, requiring admissions staff to meet enrollment targets and training them to entice potential students with visions of celebrity-chef stardom. Students were accepted for admission based solely on their ability to procure a loan, in some cases (according to other former students) despite severe learning disabilities.

In 2008, CEC paid $200,000 to settle with the Pennsylvania Attorney General over charges it duped students applying to its Lehigh Valley College into taking high-interest loans and overstated the opportunities for graduates. Students had charged the school lied about “low-interest government loans” that were actually private loans charging as much as 15% interest. Lehigh Valley charges tuition and fees up to $37,500 for an associate’s degree, compared with about $5,600 at local community colleges.

Career Education Corp President and CEO Gary E. McCullough took home over $4.8 million in 2008.

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