CLCX:
Now Texas and Illinois join Virginia and Maryland; just 46 more states to go...
quote.bloomberg.com
Computer Learning Sanctioned in Texas and Illinois (Update2) (Adds Illinois suspension, details throughout)
Houston, Dec. 18 (Bloomberg) -- Computer Learning Centers Inc., a nationwide chain of vocational schools, was ordered to offer refunds in Texas and suspend enrollment at an Illinois campus by state regulators investigating its practices.
The actions are the latest regulatory problems for the Fairfax, Virginia-based operator of 26 schools, most of whose students pay tuition with federally guaranteed loans. The company last week said it took a $326,000 after-tax charge in the third quarter to pay for fixing regulator shortcomings and hired an executive to handle compliance.
Computer Learning also faces the threat by Maryland officials to revoke its license because of violations including ''grossly deficient'' records and admitting students who failed entrance exams. The U.S. Department of Education found 17 areas of non-compliance with its rules, including ''serious'' lack of administrative capability in Virginia.
In Texas, ''over 200 admissions violations were identified during the complaint investigation process,'' the Texas Workforce Commission said of Computer Learning's school in Houston, which has 500 students. It cited disregard for valid testing procedures and admissions standards and found ''widespread student dissatisfaction'' during a visit in April.
It said the company must offer refunds to about 200 students who were enrolled even though they failed admissions exams. The board's report was obtained from Texas investigators this week under the state's public records law.
Computer Learning hasn't disclosed the refund order to investors. It decided the order wasn't material to its overall financial health, said spokesman Michael Geczi. The company wouldn't provide an estimate for the cost of the refunds.
Illinois Order
Today, the company was ordered to halt enrollment of new students at its Schaumburg, Illinois, campus by state regulators, who cited ''numerous ongoing deficiencies'' at the school. The Schaumburg school was ordered to halt all enrollments, sales, marketing and advertising until at least Jan. 19.
The Illinois board found the school misled prospective students about job prospects, engaged in ''sloppy record keeping'' and may have attempted to impede the state's investigation. ''These are extremely important concerns, because the state board believes that every student, public or private, youth or adult, has a right to an adequate and fair education,'' said interim Illinois Superintendent Robert Mandeville.
The school was given 30 days to fix rule violations or face shutdown by the Illinois State Board of Education. ''We are fully confident that we will be able to satisfy all of Illinois' concerns, Geczi said.
Share Slide
Computer Learning's shares have dropped 86 percent from this year's closing high of 38 3/4 on Feb. 2. They fell 9/16 to 5 7/16 today on trading of 1.1 million shares.
Earlier this month, the company said earnings in the quarter ended Oct. 31 fell 82 percent as enrollment at schools owned for more than two years slumped 18 percent. It predicted continued enrollment decreases amid the scrutiny from regulators.
This week, Computer Learning said it created a new position, vice president of regulatory compliance. It hired Marie Bennett, a former school accreditation official, to fill the post. From 1995 to 1997, she was an executive at the Accrediting Commission of Career Schools and Colleges of Technology.
The company has schools in San Francisco, Los Angeles, Anaheim and San Jose, California, Philadelphia, Pittsburgh, Chicago, Las Vegas, Atlanta and Montreal.
The results of the investigation at the Houston school found that 59 students who later dropped out didn't meet admissions requirements when they enrolled. The school lacked documentation that another 23 current students met admissions standards, while 120 applicants were improperly given passing grades on an admissions exam, the report said.
Working Together
Geczi, the company's spokesman, declined to comment on the specific allegations in the report. ''The company and the commission are working together to see the exact number of students entitled to refunds,'' he said.
The Houston school charges $10,000 to $15,000 for its eight- to 10-month courses, Geczi said.
Last week, Texas investigators said employees at the Houston campus helped students cheat on exams and lied about the earnings potential and job prospects of graduates. This week, the Houston school began operating under a state-mandated corrective-action plan under threat of having its license revoked.
The Texas investigation found a variety of teaching problems at the Houston school, including high instructor turnover, incompetence and teachers reading word-for-word from manuals. No prior teaching experience was found for 67 percent of teachers, and 25 percent had only a high school education. One instructor used class time to receive instruction from his students in the use of a computer system, investigators found. . |
