For-Profit Brown Mackie College Ceasing Enrollment, Phasing Out Most Locations

The nation’s second largest for-profit educator, Education Management Corporation – the operator of chains like Brown Mackie College, Argosy University and the Art Institutes – will stop enrolling students at most of its Brown Mackie locations while “teaching out” the students that remain.
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UPDATE: A spokesperson for EDMC tells Consumerist that 22 Brown Mackie College campuses have ceased enrollment as of Friday, while four locations will continue taking new students.

“Education Management has made the decision to not accept new enrollments into programs at 22 locations of the Brown Mackie College system of schools,” Bob Greenlee, a spokesperson for EDMC tells Consumerist. “We remain committed to assisting currently enrolled students in successfully completing their programs of study. Our goal is to ensure that currently enrolled students receive an education that will equip them with the skills and expertise they need for practice in their chosen field.”

While EDMC couldn’t comment on the “on-going business” related to the status of the four campuses that will continue enrolling new students, we’ve received copies of emails demonstrating how employees and students at the for-profit chain are being given the news about the eventual closing of the 22 campuses.
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A person close to the matter tells Consumerist that while the locations will no longer enroll new students, they won’t immediately be closing.

There are currently 26 Brown Mackie College locations in 15 states. As of 2013, the school enrolled approximately 17,000 students. We’ve reached out to EDMC for comment on the matter and will update this post when we hear back.

According to the source, four of the Brown Mackie campuses are seeking different ownership, but it’s unclear what companies have been approached.

Additionally, it was unclear exactly how EDMC planned to handle the teach-out program for students currently enrolled at the schools.

A teach-out option typically puts in place arrangements to ensure that all currently enrolled students can either complete the course of study or transition to a mutually agreed course at no disadvantage to the student.

In addition to stopping enrollment at the Brown Mackie College locations and beginning teach-outs, the source tells Consumerist that at least two executives with the schools have left the company, including a regional vice president of human resources and president of Brown Mackie College.

This isn’t the first time EDMC has moved to end enrollment at some of its campuses.

Last month, the Pittsburgh Tribune reported that EDMC has laid off more than 200 employees, mainly in its online division.

Prior to that, in January, the Tribune reported EDMC would stop enrollment at three Art Institutes in Tucson, St. Louis and Los Angeles. The schools were expected to be closed within the next several years once students have transferred to other schools or complete their educations.

Last May, EDMC announced it would shut down 15 of its 52 Art Institute campuses across the country.

The closures mainly involved off-site learning or branch locations in cities where the company has more than one Art Institute location.

In all, the closures affected nearly 5,400 students at campuses in Georgia, Ohio, Texas, Florida, Missouri, Michigan, New York, Utah, California, Washington D.C., Wisconsin and Pennsylvania.

Campuses on the chopping block were to undergo a teach-out program, which allowed currently enrolled students to complete their course of study. The process is expected to take two to three years to complete.

“Our primary concern is ensuring that currently enrolled students receive a high-quality education that will equip them with the skills and expertise they need to earn a meaningful return on their educational investment,” a spokesman for the company said at the time.

EDMC – which is partially owned by Goldman Sachs – has faced its share of issues in recent years, from agreeing to pay $95.5 million to settle fraud and recruitment violations to falling enrollments and financial difficulties and increased scrutiny from state and federal regulators.

In November, the Department of Justice announced a settlement with EDMC, which involves 39 states and the District of Columbia, putting an end to a long-running lawsuit accusing the second largest for-profit education company of defrauding the federal government.

In all, the settlement resolves four separate lawsuits filed in federal court in Pennsylvania and Tennessee.

The primary allegation in the suit revolved around EDMC’s unlawful recruitment of students by offering employees bonuses or incentives based on the number of students they enrolled.

Additionally, the deal settles a consumer fraud investigation by a consortium of 40 state Attorneys General into EDMC’s deceptive and misleading recruiting practices.

The consumer fraud settlement requires EDMC to undertake various compliance obligations, including detailed disclosure obligations to students; prohibitions on deceptive or misleading recruiting practices and oversight by an administrator to ensure compliance.

EDMC was revealed to be on the lowest tier of the Dept. of Education’s Heightened Cash Monitoring list last year.

[This story has been updated to reflect information confirmed by officials at EDMC and Brown Mackie.]