Sanford-Brown College has announced the decision to close all of their schools, and have stopped enrolling new students. Parent company the Career Education Corporation (CEC) said they will shift focus to their online universities, Colorado Technical University and American InterContinental University. Sanford-Brown College will undergo a "teach out" with current students until they graduate. The colleges are gradually discontinuing operations and program; the process is expected to take anywhere from 18 months to about 3 years to complete.
Chairman and interim CEO of CEC, Ron McCray, blaimed the decision on financial losses, declining enrollment numbers, and harsh regulations implemented on for-profit colleges. Last fall, the Department of Education announced new "gainful employment" regulations, which base a college's access to federal loans on whether the estimated loan payment of a typical graduate exceeds 20% of the borrower's discretionary income, or 8% of total income. According to the DOE, programs that exceed the aforementioned thresholds are at risk of losing their ability to access funding from federal student loan programs. Ron McCray attributes the new regulations as a factor in the decision â€œThe unfortunate reality is that a more difficult higher education marketplace and challenging regulatory environment have handicapped our ability to turn these institutions around quickly and operate these programs effectively long-term, he stated. For-profit colleges have been a target of the Obama administration as the government attempts to gain control over the rising student loan debt epidemic.
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