RI-Based For-Profit College Falsified Employment Rates

RI-Based For-Profit College Falsified Employment Rates

A Cranston-based for-profit college was inflating its graduate employment rate by more than 20 percentage points, new figures show.

The Sanford-Brown Institute, which has campuses across the country, is among more than three dozen for-profit schools owned by Career Education Corp. that have job placement rates below 65 percent, the minimum rate allowed by the Accrediting Council for Independent Colleges and Schools (ACICS)

The Cranston campus, which was formerly the Katherine Gibbs College, reported having a 75.93 campus employment rate in 2010. But after Career Education Corp. ordered an audit of each of its schools’ graduate employment rates, the new figures show the rate was actually 54.4 percent, more than ten points below the rate deemed acceptable by ACICS.

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Not Genuine Placements

The issue of falsified employment rates was first raised by the New York Attorney General’s office, who subpoenaed a number of proprietary college companies to question the accuracy of job placement rates.

After originally only looking into the New York-based schools, Career Education Corp. decided to assess all of its schools, finding dozens of irregularities in the way they report their employment rates.

"We have uncovered the fact that what were going to be reported as placements in a number of cases and a number of places were not genuine placements according to our standards as a company,” Steven Lesnik, the company’s new Chief Executive Officer, said during a third quarter earnings report last at the beginning of the month.

Restrictions Could Come

According to the website California Watch, the lowest job placement rate came at Sanford-Brown’s Indianapolis campus, which found that just 18 percent of graduates were employed in their field of study.

In addition to the Cranston campus, two other Sanford-Brown schools in New England fell below the 65 percent threshold. In Boston, the school's employment rate was 64.3 percent and in Farmington, CT, the rate was 51.4 percent.

According to a press release issued by Career Education Corp., the ACICS requires schools to have at least a 65 percent job placement rate. In the event that an institution reports numbers lower than that threshold, it may be subject to increased accreditation oversight, which may include increased reporting requirements, a requirement that the institution submit a corrective action plan or undergo an on-site evaluation, or restrictions on the addition of new locations or programs.

It is unclear exactly how the schools got away with offering false employment rates, but during the earnings call, Lesnik said the investigation turned up a “myriad” of possible causes for the errors in reporting.

Calls to Career Education Corp. have not been returned.

The organization is going to continue looking into all of its schools, but currently has only completed its investigation of the schools that focus on health and art and design. Career Education Corp. also runs several culinary colleges.

“Across the health unit, we saw improper actions that were being taken and employees that were involved in any of those improper actions, we've dealt with,” Michael Graham, the company’s Chief Financial Officer, said during the earnings call.

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