I first heard about this controversy on 88.5 WFCR (the local public radio station) a couple days ago. The piece discussed the growing phenomena of "for-profit schools" particularly as it manifests itself within culinary institutions. A number of students banned together in solidarity and filed a class action law suit against the Cordon-Bleu on several campuses for fraud. I only recently realized that the Cordon-Bleu is now a subsidiary of the Career Education Corporation (CEC), and by extension, the basic structure and decision-making -- like all other corporation -- incentivized by profit maximization. The CEC owns roughly 90 campuses worldwide. According to the Securities and Exchange Commission 10-k form, in 2009, the company made $1.6 billion in revenue leaving $81 million in net income. As far as my slow brain can tell, this reveals an immediate contradiction in priorities: the students, as is typically the case for centers of learning, or profits, as is the driving force of any corporation and the backbone of basic economic theory. Ultimately, students attend the institution, are hit with $50,000 worth of debt, and then graduate, now qualified for positions offering wages (not salaries) for $8.00 or $12.00 per hour.
So, who are the winners in this situation?
More information HERE
The SEC 10-k form HERE
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