Maxie Burch knew something was wrong when his campus e-mail account stopped working one recent morning. Then a maintenance man showed up to change the locks on his office door at Grand Canyon University, where the associate professor of Christian studies had taught for eight years. At 3:30 that afternoon, two security guards and a university official arrived to escort him from the campus.
The Career Education Corporation, one of the country's biggest for-profit higher-education companies, disclosed last month that the U.S. Department of Education had put a freeze on approving new applications for additional campuses or acquisitions while it examines the company's financial records and compliance with federal student-aid regulations.
For-profit higher education has continued to grow at a pace that once seemed unsustainable, thanks to an influx of capital, a favorable regulatory climate, and the industry's own nimble reaction to the changing demands of students.
The Education Department of the State of New York is clamping down on a fast-growing for-profit college that specializes in recruiting financially needy students who haven't graduated from high school.
In an apparent first, the for-profit higher-education industry has begun collecting data on the salaries of its college administrators. Last month, at the Career College Association's annual meeting here, it released some of the initial findings -- with some strong caveats.
American InterContinental University has been put on probation for a year by its accreditor, the Southern Association of Colleges and Schools. The for-profit university, which is owned by the Career Education Corporation, has bounced in and out of trouble with the accreditor over the last few years.
A watchdog official at the U.S. Education Department last week urged lawmakers to "go slowly" on proposed legislation that would relax some rules that for-profit colleges must follow to participate in federal student-aid programs.
If you had typed "Grantham University" into Yahoo's search engine last week, what would have appeared at the top of the page, above the actual search results, was not a link to Grantham's Web site but an ad for the University of Phoenix -- a "sponsored result," in search-company parlance. Sponsored links to other companies offering online-degree programs also appeared to the right.
TAMPA, Fla. -- For-profit colleges are booming. But a new fight between these upstarts and the education establishment raises a key question: How much are degrees from for-profits really worth?
State agencies in New Jersey and Pennsylvania are reviewing the recruiting or financial-aid practices of two colleges owned by the Career Education Corporation, according to a quarterly report the for-profit higher-education company filed last week with the U.S. Securities and Exchange Commission.
Politically and financially, the $15.4-billion for-profit higher-education industry is on a roll. The legislative environment is friendly, enrollments and profits continue to grow, and demographic trends suggest strong opportunities for further expansion and profitability.