Two For-Profit College Chains to Close

Two more for-profit colleges announced this week they will close, Fortune Magazine reported.

The news comes after Corinthian College's announcement last month that it would close its remaining 28 campuses, displacing 16,000 students.

Pittsburgh-based Education Management Corporation said it will gradually close 15 of its 52 Art Institute campuses, which currently serve about 5,400 students. Current students will be allowed to finish their degrees, but the schools will not enroll new students.

Schaumburg Illinois-based Career Education Corporation announced it will close its 14 Sanford Brown College and Institute campuses and online programs in the next 18 months and sell three of its other colleges. Those institutes enroll about 8,600 students. The company previously announced it is selling Le Cordon Bleu Colleges of Culinary Arts and its Harrington College of Design in Chicago.

For-profit schools have been criticized by the current federal administration as it makes efforts to curb mounting school debt, Fortune reported. Last fall, the U.S. Department of Education announced "gainful employment" rules that base a programs access to federal loans on whether the estimated annual loan payment of a typical graduate exceeds 20 percent of the student's discretionary income or 8 percent of total earnings. At that time, the department estimated about 1,400 programs serving 840,000 students (99 percent of whom attend for-profits) would not meet the standards. Federal aid makes up nearly 90 percent of for-profit institutional revenue, reported Fortune.


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