Career Education Corporation (CEC) has made a career of handing out diplomas. The for-profit company owns and operates about 90 domestic and international campuses offering postsecondary education to roughly 100,000 students. CEC offers certificate and degree programs in areas including information technology, health education, business studies, culinary arts, and visual communication and design. The group's operating names include Colorado Technical University (CTU), Sanford-Brown Institutes, Le Cordon Bleu, and American InterContinental University (AIU). CEC schools offers non-degree certificates as well as associate, bachelor's, master's, and doctoral degrees.
The company is organized into six business segments by key market to align its brands and facilitate future growth. CEC's two largest segments each account for about a quarter of sales: CTU, which includes five US campuses offering information technology, business studies, criminal justice, and engineering degrees; and health education, which includes more than 40 Sanford-Brown, Briarcliffe, Brown, and Missouri College locations.
Its other divisions -- AIU, art and design, culinary arts, and international -- also offer technology, business, and health degrees, along with non-traditional programs such as film production, interior design, graphics, pastry arts, and hotel management. A separate segment called transitional schools was eliminated in 2010 after the company completed a restructuring plan that included selling off or closing the underperforming campuses within that segment.
CEC's campuses are scattered throughout the US, as well as in France, Monaco, and the UK; it exited the Italian market in 2011. Despite its extensive network of bricks-and-mortar campuses, about 40% of the company's students are enrolled at one of its online universities (some of which also operate physical campuses).
CEC growth strategies produced steadily rising sales figures each year from 2007 to 2010; however, in 2011 the company's revenues dropped 11% to some $1.9 billion, primarily attributed to reductions in student numbers due to economic conditions and regulatory changes. The firm has fallen under increased scrutiny by US government and state agencies, which are investigating some of CEC's job placement statistics and its marketing and financial aid practices; these investigations and related regulatory changes have in turn caused some negative publicity and increased restructuring expenses for CEC. As a result of its struggles, CEC recorded a $168 million impairment charge in 2011 to reduce the value of its health education and culinary arts segments (both of which experienced student declines and operating losses that year), leading to a sharp drop in CEC's overall profits (net income fell from $158 million in 2010 to some $18 million in 2011).
To bring its operations up to par with new federal regulations, CEC has launched a new program to better educate prospective students about program costs and requirements. It has also increased efforts to make sure its students are college-ready (and not liable to default on loans), changed its admission representative compensation guidelines, enhanced its gainful employment programs, and changed its graduate career placement tracking procedures.
Corporate restructuring efforts in recent years have included offloading about a dozen of its underperforming US campuses in 2009 and 2010. Further efforts to simplify its organization in 2011 included the divestiture of its Istituto Marangoni, which operated campuses in London, Paris, and Milan, Italy. CUC is also working to reduce the number of brands that its schools operate under; for instance, most of its culinary schools were brought under the Le Cordon Bleu umbrella during 2011.
The company continues to make efforts to grow, despite its financial hurdles. In addition to attracting new students to its existing campuses, a key component of CEC's growth strategy is to establish branch campuses in new markets. In 2010, the company opened six campuses; however, reduced student interest caused it to slow its growth efforts and only open two new locations in 2011.
Along with establishing new campuses, CEC also makes acquisitions from time to time. In 2010, the company acquired the International University of Monaco, which offers programs in such areas as finance, international business, and luxury goods and services. The Monte Carlo-based school is part of CEC's INSEEC group, based in Paris. In 2011 the firm acquired Everblue Training Institute, an energy conservation and design school in North Carolina, for some $10 million; Everblue was added to the International Academy of Design & Technology organization within the art and design segment.
Investment firms Blum Capital Partners holds about a 20% interest in the company. – less
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