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More Scrutiny for Career Education Corp.

Career Education Corporation quietly announced Monday that officials in Pennsylvania and New Jersey had begun investigations of campuses the company owns in those states. The revelation comes on the heels of a finding last month by a California agency that a Career Education campus there had “willfully” misled students to get them to enroll.

Buried in its quarterly filing (Adobe Acrobat required) with the U.S. Securities and Exchange Commission was news that Pennsylvania’s attorney general had alerted the for-profit provider of higher education that it was reviewing the business practices of Lehigh Valley College, which was formerly Allentown Business College.

Career Education, which has managed the college since 1995, said that Pennsylvania’s Bureau of Consumer Protection had requested documents “relating to Lehigh’s recruitment practices, student complaints, and financial aid policies and procedures.”

The company said that the investigation seemed to have been prompted by a series of negative articles that The Morning Call of Allentown published last month, which accused the college of engaging in misleading sales tactics, among other things. Career Education, which denied the newspaper’s charges, said in its regulatory filing Monday said that the company planned to cooperate fully with the attorney general’s investigation.

The SEC filing also reported that the New Jersey Department of Labor and Workforce Development had followed up on a highly critical “60 Minutes” report — which focused in part on the company’s Sanford Brown Institute campus in Iselin, N.J. — by demanding in May that the company explain the issues raised in the television report and argue convincingly that the campus “should be allowed to continue to operate.” Career Education said in its filing that the college had submitted a formal response to the New Jersey agency last month.

The company faces a long list of other federal and state regulatory inquiries and student and securities litigation, Career Education acknowledged in its filing.

Doug Lederman

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Comments

Comments From Gibbs College Students in Farmington Connecticut

From: javier arroyo Sent: Tue 2/19/2008 10:29 AM To: Noemi Torres Subject: RE: Important Student Update Hi Noemi, I understand just what you are going through. It’s hard to work a full time job and have to sacrifice long evenings from five to eleven just get one class out of the way. You are not alone in this. Thank you for writing back, I will make sure that this letter will be posted and followed up on what is happening here at Gibbs. Sincerely,Javier Arroyo, Jr.

________________________________________ From: Noemi Torres Sent: Tue 2/19/2008 10:24 AM To: javier arroyo Subject: RE: Important Student Update Wow. Hey my name is Noemi Torres and I attend Gibbs at night 6-10 I do have full time job during the day and have to go to class at night with 2 children to take car of when I get home all tired! When I first started my Gibbs experience on 07/16/2007 I wasn’t working , but I was a part timer with only two classes, and was actually dropped on my 2nd term for missing my first 2 weeks of only one of the classes I was taking!!! So I got all upset and thought of not even returning to the school, but not only do I want to succeed in life I didn’t want to feel like a drop off, so Gibbs advisors and Staff Convince me to go back and I did! Why if the already knew the news of the closing!! I just don’t understand I’m really confused about the whole situation I just don’t see why? And how?It takes a lot for a Single mother to get up in the morning go work get out and go straight to class because there is no time to see my kids or even have dinner and now this. Is just not fare!

From: javier arroyo Sent: Tue 2/19/2008 10:42 AM To: Christen Rameika Subject: RE: Important Student Update Hi Christen, I totally understand what you are going through. I too feel that we are getting a fast food education and there isn’t really time to get into the heart and soul of the programs administered through the school. It is fast paced, rushed and simply nerve racking experience and on top of it all, I do not really feel we are getting the most out of our education. I have sent the original letter that was globally sent to the students and another letter I wrote stating the financial burden the students will be in because of these issues. I will make sure that that the Attorney General will see all of our letters and see if we have a right to fight this. Thank you,Javier Arroyo

________________________________________ From: Christen Rameika Sent: Tue 2/19/2008 10:11 AM To: javier arroyo Subject: RE: Important Student UpdateI totally agree with what you said. I was so comfortable when I signed up for classes in December, and now I’m really worried about whether or not I will end up somewhere I was promised I could be. And what if someone fails a class and has to take it over? I feel that we are being so rushed and there is no room for error........ How is this fault??? We shouldn’t have to rush and sacrifice more of our lives just to cram in the classes we were promised we could take at our leisure. And our student loans??? I totally don’t understand why they’re dropping this on us now. You’re right, we definitely should have known. I’m more than a little nervous!

From: javier arroyo Sent: Tue 2/19/2008 10:48 AM To: jesenia valentin Subject: RE: Important Student Update Hi Jesenia, Thank you for your response. There are many students who are sharing their frustration and replying to this e-mail. If you have any concerns or disappointments please send them to me. I am collecting all of these letters and will be sending them to the Attorney Generals Office. Thank you,Javier Arroyo

________________________________________ From: jesenia valentin Sent: Tue 2/19/2008 10:25 AM To: javier arroyo Subject: RE: Important Student UpdateSpeaking on behave of every single student, thank you for insisting on expressing your thoughts towards this teach out. I feel that many of us feel the same way, including me. This isn’t fare financial wise and even the education is not met to our expectations. I’m sure most of us are figuring out how we can resolve this for a better outcome of the situation.

From: javier arroyo Sent: Tue 2/19/2008 10:43 AM To: Ema Colon Subject: RE: Important Student Update Hi Ema, Thank you for writing back. If there are any complaints you have or disappointments please e-mail them to me. I have written a letter to the States Attorney’s Office to see if they can do something for us. I have been getting many complaints from the students and I am collecting these for the Attorney Generals Office to see if we will be compensated in some manner or another. I will keep all the students posted ads to what will happen next. Thank you,Javier Arroyo

________________________________________ From: Ema Colon Sent: Tue 2/19/2008 10:29 AM To: javier arroyo Cc: KAmenta1@gibbsnorwalk.com Subject: RE: Important Student UpdateWell said Javier!!!! You nailed it on the head!!!!! I feel your frustration as well. At this point what’s done is done but at least Gibbs will know how we feel.

From: javier arroyo Sent: Tue 2/19/2008 10:59 AM To: Ema Colon Subject: RE: Important Student Update Hi Ema, Thank you. I believe this will be good for students who are willing to commute to and from HTFD to Bridgeport but the reality is, with the gas prices and the economy the way it is today, most students will be in a much greater debt rather than staying ahead of the game. For me traveling to Bridgeport is out of the question especially when I have a full time job which will not allow me to have that flexibility. Plus $100.00 to and from is completely out of the question! Thank you,Javier Arroyo

________________________________________ From: Ema Colon Sent: Tue 2/19/2008 10:47 AM To: javier arroyo Subject: RE: Important Student Update Javier, Another thing. I just received a brochure from University Bridgeport on their Graphic Design or Vis Comm program or rather. Just received it Saturday. Maybe that gives us hope but your frustration is still valid. The program probably just started from the last time you called. It’s a haul but at least for sure ALL Gibbs credit is accepted there. From: javier arroyo Sent: Tue 2/19/2008 11:05 AM To: Kristin Blakeslee Subject: RE: Important Student Update Hi Kristen, I am hoping that something will come from this too! Hopefully this will give us an edge. As I am receiving all of the responses from the student, I am collecting each letter and I will be sending those to the States Attorney’s Office. Thank You,Javier Arroyo, Jr.

________________________________________ From: Kristin Blakeslee Sent: Tue 2/19/2008 10:37 AM To: javier arroyo Subject: RE: Important Student UpdateWow. Nice email Javier... Maybe a law suit needs to be filed... you have quite a few good points... and not to mention, upon your interview before you’re ‘accepted’, they HAMMER You about PROMISING to graduate and finish your education with them.. And I too am having a very hard time accepting the fact that one... My credits will barely transfer anywhere if I want to go on for a bachelors and two, that if I do choose to apply for a job in my new field with this Gibbs degree I will almost be embarrassed by the fact the school has closed down in so many locations and I don’t think the employer will be too impressed either.. I truly do almost feel that a law suit should be filed on behalf of any students who enrolled in 2006 and after... for at least partial tuition reimbursement.

From: javier arroyo Sent: Tue 2/19/2008 11:12 AM To: Krisztina Banyai Subject: RE: Important Student Update Hi Krisztina, Exactly, what is the sense of continuing a mediocre education if it is not going to give anything back. If you have any more information you would like to give send your grievances to me, I will be sending them to the States Attorney’s Office. Thank you,Javier Arroyo

________________________________________ From: Krisztina Banyai Sent: Tue 2/19/2008 11:10 AM To: javier arroyo Subject: RE: Important Student Update Hi, I am very glad that somebody took the time to put our thoughts in a letter. It is a very sad situation. I feel like I spent so much time and money to be able to complete all my classes here at Gibbs and now it looks like everything is just falling apart. The education level I am almost positive that will drop, because the teachers are probably just as upset as we are students. But I can say that my major, major concern is that They HAVE SAID many times that we are going to be able to transfer to UB to get our BS. Well, I have talked to the advisors there and they have informed me that we are only allowed to take 66 credits. So, then I ask what is the point to complete any other courses here after the 66 credits? Sincerely,Krisztina Banyai

From: javier arroyo Sent: Tue 2/19/2008 11:21 AM To: Christen Rameika Subject: RE: Important Student Update Christen, I do not have all the answers but I am working on seeing what can be done through the Better Business Bureau or through the Attorney Generals Office. I will keep all of the students posted. Javier Arroyo ________________________________________ From: Christen Rameika Sent: Tue 2/19/2008 11:10 AM To: javier arroyo Subject: RE: Important Student UpdateSounds good. But do we actually have an answer about what we will be stuck with as far as the loans go? I know they said in the FAQ that refunds can be given if we withdraw now, but I wonder if they will refund money for classes that we don’t have time to take. I’m also nervous how it will look to possible future employers... how will it look if we apply for a high demand job with a degree from a school that doesn’t exist anymore?? It’s crazy.

________________________________________ From: javier arroyo Sent: Tue 2/19/2008 12:06 PM To: John Kane Subject: RE: Important Student Update Hi John, Thank you for your thoughts. If there is any information that you would like to provide on this matter please feel free to write in and send me your e-mails. I will be sending all of the student letters to the Attorney Generals Office. If you have anything and you want to voice your opinion please write. We have already received an overwhelming response from many students as they have written in. Thank you, Javier Arroyo Please see attachment provided.Subject: RE: Important Student Update

I second Javier’s message. I was told that Gibbs would offer the world when I first signed up. They also said that their credits were transferable to many colleges in the state. This is a lie. I would suggest other student to voice the opinions. This should be a class action lawsuit.

John Kane

________________________________________ From: javier arroyo Sent: Tue 2/19/2008 1:06 PM To: Lisa Bleggi Subject: RE: Important Student Update Hi Lisa, I have also been receiving a lot of this same misleading information. Promises broken and expectations unmet. You are not the only one who has stressed the importance of the human contact or personal attention. Let’s keep our heads up; I am working on passing along this information to the Attorney Generals Office in hopes that our voices will be heard. Lisa, thank you for your thoughts as they will be passed along to those who will help us. Thank you,Javier Arroyo

________________________________________ From: Lisa Bleggi Subject: RE: Important Student Update I have to agree how disappointing this is. I really looked around before joining this school and know that this is the only school in CT that has a program for fashion design. The only other place to go is RI or NY and I know for a fact that FIT in NY does not accept Gibbs credits either. I am sure Parsons or Pratt would also have the same issue. Though I almost ready to graduate I was promised that this school would continue to help find me work long after graduation and it would seem what was promise would be unlikely. I don’t think you get much personal attention from a website as you do from a real person who knows you and can help you meet your requirements in the job force. All along, I have been told how Gibbs wants to become a 4 year school and up until 2 days before Mr. Peterson’s announcement, we were being told that new classes/programs were being offered. It seems to me that Mr. Peterson knew about this when he took over the position of President. This school cost $35,000 per degree, and I see new students coming in every day. It seems to me that the school could have supported itself during hard times and that another solution could have been met. Lisa Sodaro

From: javier arroyo Sent: Tue 2/19/2008 1:17 PM To: Sara Jarry Subject: RE: Important Student Update Hi Sara, Thank you so much for the information you provided. This truly hits the homes of those families who are left with very substantial debts. Tonight I will be going to one of my classes so that we can start to deliver our complaints to the States Attorney General Office. You are not alone, it’s going to take some time but we are working this matter out. Thank you,Javier Arroyo

From: Sara Jarry Sent: Tue 2/19/2008 1:12 PM To: javier arroyo Subject: RE: Important Student Update Dear Javier, I am so glad someone finally said what I have been thinking and talking about with my family for months now! I am also very disappointed with lack of professionalism and knowledge of this school. For $35, 0000 god damn dollars a degree, I was also expecting the faculty to be way more educated in the courses they were teaching us. (Not all faculty, but MOST) I am wondering what the qualifications for teaching here at this school is?? I would really like to know. I feel I have thrown my money down the drain with what I have got out of this school. Especially since these credits are not transferable, which I was also told they were. Please continue to get students feedback regarding these issues. I personally think it is not fair to take out all these loans that accrue huge amounts of interest and get less than mediocre education for it and be lied to about the credits being able to be transferred. Thank you for sending out this email. It makes me feel better knowing I am not the only student thinking these things. Please keep encouraging other students to speak out as well. I also signed up for “day” classes, which almost no classes are held during the day. Another thing I was mislead about...-Sara

________________________________________ From: javier arroyo Sent: Tue 2/19/2008 1:31 PM To: Lisa Bleggi Subject: RE: Important Student Update Hi Lisa, Thank you for your thoughts. It would be good if Gibbs will continue to keep their promises. For those who will be graduating soon and were promised help with job placement some students have already expressed their disappointment. Students will have to go online to find help taking out the personal contact of the whole process. It seems that things are either going to change for the better or the worst. Let’s hope that something will come of this as more students continue to send in their thoughts. I am collecting these e-mails and will be sending the e-mails to the States Attorney’s Office. Thank you,Javier Arroyo

________________________________________ From: Lisa Bleggi Subject: RE: Important Student Update I just received a phone call from Kurt Peterson saying that he had no idea when he took over the position of President that the school was closing. So if I made any wrong assumptions I apologize. However, I will continue to express my disappointment in the school closing and impress upon the staff to support their alumni after graduation in the work force, whether if be a full/part time or freelance employment. For some of us, we have the issue of family and the prospect of being a little older starting a new career can be a little scary. It’s important that the school continues to make good on their promises no matter what the future holds.Lisa Sodaro

From: javier arroyo Sent: Tue 2/19/2008 1:44 PM To: Chris Hernandez Subject: RE: Important Student Update Hi Chris, Thank you so much for your thoughts. It seems like many of the students at Gibbs are going to have to consume the cost for an incomplete education. Hopefully we will hear something from the Attorney Generals Office soon.I sent two letters, one was the original global letter to the students about Gibbs closing and the other was a letter expressing in great detail how our financial aid rewards were being spent an our education.

Lets wait and see okay. Thank you, Javier Arroyo From: Chris Hernandez Subject: RE: Important Student UpdateI third that. I emailed my father when I found out that Gibbs was closing and he called Manchester Community College. They very nicely told him that the credits are not transferable?! I’m most likely going to have to eat the money I blow on Gibbs because of that. I’m sorry that’s not right. Granted I’m only in my second semester at Gibbs, I still have money sunk into the school. That just makes me mad. I work hard for the money I have, and I like having something to show for the money I spend...not here at Gibbs!!

________________________________________ From: javier arroyo Sent: Tue 2/19/2008 2:03 PM To: Sara Jarry Subject: RE: Important Student Update Hi Sara, Since e-mailing the letter to Peterson around 10:07 am this morning I have only had 11 people respond. I think we need to let people know in school that this letter has gone out and we are waiting for responses from the students. I will be going to Gibbs College tonight in hopes that I can get students to sign a petition that will be utilized in our efforts to send those signatures to the Attorney’s office. I will also get students to read the information provided so to bring awareness to the issues at hand.Javier Arroyo

________________________________________ From: Sara Jarry Sent: Tue 2/19/2008 1:55 PM To: javier arroyo Subject: RE: Important Student UpdateHello again Javier,

I had no idea that the school changed the way we were being billed? Was there an e-mail sent out? I would really like a statement or something from the financial aids office breaking the billing down for me after hearing that. I also think that it is absolutely horrible that Jack said there was nothing they could do about it! They will do something about you being billed for classes that you did not take. I don’t understand how that is acceptable. You should not be charged for classes you did not take! It sounds to me that everyone that this happened to was taken complete advantage of. I will find out if this has happened to me and if it has, something will be done about it. If the school is not accepting new students then why did the receptionist encourage your wife to come into the school?

Thank you again for taken such action regarding all of these matters. -SaraP.S How many students do you think have responded to your emails?

Sara, There was not an e-mail sent out. Or any information whatsoever! They just changed to the new system and come registration day there were explanations of changing to the old system to the new for credits sake but no letter was ever issued at al! We need to get this in writing if we are ever going to bring this to light. This is to my recollection!Javier Arroyo

From: Sara Jarry Sent: Tue 2/19/2008 2:20 PM To: javier arroyo Subject: RE: Important Student UpdateI was never told about it. I will be writing my own letters as well to the necessary people after I look into it a bit more and speak with financial aid and Jack.

From: javier arroyo Sent: Tue 2/19/2008 2:37 PM To: Kristen Shackett Subject: RE: Important Student Update Hi Kristen, I thank you for these words and we will use them to our benefit. I am working hard to see if we can organize a petition and have signatures ready for the States Attorney’s Office. All the responses from the students will be printed and sent to the Attorney’s office so that he could read the letters and conclude what can be done about these issues. Thank you,Javier Arroyo

________________________________________ From: Kristen Shackett Subject: RE: Important Student Update This is the email that I sent to Kurtis Peterson: “I enrolled in Oct 2007. If I had been made aware that they made a decision to sell the school back in Nov of 2006 I would not have enrolled! My anticipated graduation date is 9/2009 however I have a physical disability so I don’t attend full time, I can only take two classes, and that is sometimes still a little hard for me as I am just returning to school after being out for seven years and three back operations.. So I may not make the closing deadline. And I’m not sure what to do now, I was so excited when Gibbs opened in Farmington, I couldn’t wait for the day when I was healthy enough to apply! Now I feel as if I’m being left with nothing, how can this be the right decision for the students?” Kristen Shackett And this was the generic reply that I got... “The December 31, 2009 is only a projected date. The school remains committed to fulfilling our obligations to our students."I’m second quarter and I’ve been trying to decide weather or not to enroll for next term. I was going try to keep going as long as I could to work on my portfolio so I could transfer but I guess that’s not an option! So I think I may just withdrawal from this term and try to recoup some of the money I’m losing!!

If I do PLEASE email me at krs8879@aol.com I know what’s going on just isn’t right! Kristen

From: Kristen Shackett Sent: Tue 2/19/2008 6:12 PM To: javier arroyo Subject: RE: Important Student Update I understand that (as some people are saying) the “school” itself hasn’t caused this... however, they knew and kept quiet as students like myself enrolled. Kurtis Peterson called me, I asked “what if it comes down to closing time and there are 5 or 10 students left who haven’t graduated... will you stay open??” He said “Yes” I call that “Nonsense!!"Please send me any information you get; I will be withdrawing tomorrow and will lose this email... krs8879@aol.com THANK YOU!!! Kristen Shackett

From: Ema Colon Sent: Tue 2/19/2008 11:28 AM To: javier arroyo Subject: RE: Important Student Update Javier,Your letter has made me want to “pay attention” to the financial aide aspect of what I’ve been charged. Shamefully, I had too much trust in Gibbs and neglected to “take a good look” at the statements that I’ve been receiving and I now need to go back and do a thorough research on this as well. I’ll be in touch.

From: javier arroyo Sent: Wed 2/20/2008 8:22 AM To: Kristin Blakeslee Subject: RE: A piece of my mind, and piece of my heart................ Hi Kristen, Thank you so much for those words of wisdom. I am not trying to create uproar here at Gibbs but to bring awareness of what some of the students have had to go through to acquire an education. I understand the frustrations that the students are going through and it hurts my heart when I think many are going to be left with a very large burden and a substantial amount of debt with nothing to show for their time and efforts. Once again Kristen, I thank you! Javier Arroyo, Jr. ________________________________________From: Kristin Blakeslee

Subject: RE: A piece of my mind, and piece of my heart................ I understand and completely respect what you are saying here. I also believe that your education is what you yourself make of it when putting 100% effort into it. However, in defense of Javier’s email, the Farmington campus is very differently equipped than the Norwalk campus and for many visual communications students it has been a struggle with the way Farmington is equipped. Javier is one of those who you can believe didn’t just come in to Gibbs to skate by but wanted to take in and learn as much as he could to move on in life and succeed. Again I also do not blame the faculty or staff but there are two very different experiences going on between Norwalk and Farmington. That is why you are seeing more disgruntled messages coming out of Farmington. ThanksKristin

From: Mikhael Frazier Subject: RE: Important Student UpdateIf legal action is considered being taken, by any or all of the student body, the action needs to be aimed at Career Education Corp. They are Gibbs parent company. A Google search brings up results on their involvement in this current situation as well as many personal stories detailing the way they do business. The duplicitous nature of what we (the student body) were told coming into the ‘college’ in contrast to what has actually been happening in the background starts and ends with them.

________________________________________ From: Tieisha Little Sent: Wed 2/20/2008 10:03 AM Subject: RE: Important Student Update I agree. When I first enrolled, a few years ago, I was told by the staff that my credits would be transferable. I was even told that this school was becoming a 4 year college very soon. Everything, I see now, was a complete lie!!! My main goal was to transfer my credits to a University; every college I called has said “Gibbs school credits are NOT transferable. Not even my community school will take my credits, I’ve wasted $40,000. On Gibbs College, and all based on lies. I’m not blaming that staff. They were probably lied to as well, but I think students need to find out who is responsible and some type of action need to take place.Tieisha Davidson

Subject: RE: Important Student Update I just received a phone call from Kurt Peterson saying that he had no idea when he took over the position of President that the school was closing. So if I made any wrong assumptions I apologize. However, I will continue to express my disappointment in the school closing and impress upon the staff to support their alumni after graduation in the work force, whether if be a full/part time or freelance employment. For some of us, we have the issue of family and the prospect of being a little older starting a new career can be a little scary. It’s important that the school continues to make good on their promises no matter what the future holds.Lisa Sodaro

From: John Kane Subject: RE: Important Student UpdateI second Javier’s message. I was told that Gibbs would offer the world when I first signed up. They also said that their credits were transferable to many colleges in the state. This is a lie. I would suggest other student to voice the opinions. This should be a class action lawsuit.

Javier Arroyo, at 1:49 pm EDT on July 2, 2008

I was alos a student at Gibbs (rip off) College in Montclair NJ. I graduted there in 2001 in the field of computer networking. Have I ever gotten a job in the field of even close to it? NO. We were all built on promises that they were so many jobs that placement had waiting for us. Our building didnt have heat in some room,one mintue you seen a techer next minute they were gone. My main course,networking, they changed the techer in the middle of semester because I heard he didnt have any degree or teaching license. I gave Gibbs 26,000 for what? and to top it off no school would accept our credits not even the county college. If anyone files a class suit let me know.

Damian Beaton, at 12:00 pm EST on March 6, 2008

computer

even tho, they will continue to get “their” money or else they will send you life insurance policies. dah

lllllll, lllllllll at gibbs colleg , va, at 2:40 pm EDT on July 25, 2006

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