Perdoceo

Perdoceo Education Corporation

Company type	Public
Industry	For-profit higher education
Founded	1994
Founder	John M. Larson
Headquarters	Schaumburg, Illinois , United States
Area served	United States
Key people	Andrew Hurst (CEO)
Products	Higher education institutions (American Intercontinental University, Colorado Technical University, California Southern University, Trident University International, University of St. Augustine for Health Sciences)
Number of employees	4,300 (2021)

Perdoceo Education Corporation (PRDO) is a publicly traded entity based in Schaumburg, Illinois, managing five for-profit higher education institutions across the United States: American Intercontinental University, Colorado Technical University, California Southern University, Trident University International, and the University of St. Augustine for Health Sciences. Previously operating under the name Career Education Corporation, the company reported revenues of $688.4 million and net earnings of $104.4 million in 2021, employing roughly 4,300 staff members.

History

Established in 1994 by John M. Larson—who remained at the helm until 2006—Career Education grew to encompass more than 24 campuses. The company expanded its portfolio in 2003 through a merger with Whitman Education Group, acquiring Sanford-Brown Colleges and Colorado Technical University. That same year, it encountered legal scrutiny over allegations of overstated financial results.

Gary McCullough held the CEO position from 2007 until 2011, followed by interim leadership under Steven H. Lesnik. In 2009, Career Education secured operational rights for Le Cordon Bleu schools throughout North America. Scott Steffey assumed the CEO role in 2013, bringing prior experience from Strayer Education and SUNY.

A Senate report released in 2014 revealed that nearly half of Career Education’s programs were at risk of failing new federal gainful employment criteria. Up until 2015, California Regent Richard Blum maintained a significant ownership stake despite concerns regarding conflicts of interest.

Todd S. Nelson became CEO in 2015, having previously led Apollo Group and Education Management Corporation. Under his direction, the company significantly reduced its campus count from over 50 to primarily digital platforms—focusing on American InterContinental University and Colorado Technical University—with enrollment reaching approximately 43,000 students by 2016.

In 2017, former executive Robert Eitel joined Secretary of Education Betsy DeVos as an advisor. The acquisition of Trident University International occurred in 2019 for between $35 million and $44 million, subsequently integrating it into American InterContinental University. Despite growth in student numbers during this period, quality indicators declined.

The organization rebranded to Perdoceo Education Corporation effective January 1, 2020. That year also saw the deferral of $39 million in Title IV funds to meet federal compliance requirements.

Perdoceo pursued further expansion through acquisitions such as DigitalCrafts for $18.4 million and Hippo Education for $43.3 million in 2021. Andrew Hurst succeeded Todd Nelson as CEO in 2022 and oversaw the purchase of California Southern University for $40 million.

In July 2024, Perdoceo announced its intention to acquire the University of St. Augustine for Health Sciences for an estimated cash payment between $142 million and $144 million, with the transaction anticipated to finalize by December 2024.

Lawsuits, investigations, and controversies

Career Education Corporation (CEC) encountered numerous regulatory challenges that influenced its business operations and financial outcomes. The U.S. Securities and Exchange Commission (SEC) initiated an inquiry in 2005 concerning revenue recognition practices and doubtful accounts; this investigation concluded without enforcement action in 2008. Simultaneously, a Department of Justice investigation spanning from 2004 to 2007 ended without charges.

In 2005, the U.S. Department of Education imposed expansion restrictions on CEC due to concerns about financial disclosures and program evaluations at Collins College and Brooks College; these limitations were lifted by 2007. American InterContinental University (AIU), a key subsidiary, was placed on probation by its accrediting body SACS between 2005 and 2007 but regained full accreditation before the end of that year.

Both Brooks College and Katharine Gibbs School—owned by CEC—came under scrutiny following a CBS 60 Minutes segment alleging deceptive admissions tactics. Subsequent findings by the New York State Education Department led to the closure of Katharine Gibbs' New York campus along with Brooks College’s locations in 2007. The California Culinary Academy, acquired in 1999, faced litigation over alleged false representations resulting in a $10 million settlement.

CEO Gary McCullough resigned in 2011 amid sharp profit declines and accusations regarding inflated student placement data; his remuneration that year approached $9.8 million. Steve Lesnik took over as CEO, bringing experience as a lecturer at Northwestern University and board membership with the Illinois Math & Science Academy Foundation. Following these controversies, investor fraud lawsuits emerged alongside a nearly 48% decrease in stock price.

In 2013, CEC resolved a $10.25 million claim with New York State concerning misleading job placement advertising. By 2014, investigations by over a dozen state Attorneys General were underway; while CEC cooperated fully, it faced potential jeopardy of federal funding under "gainful employment" regulations affecting close to 39% of its offerings.

Federal oversight intensified with enhanced cash monitoring imposed by the U.S. Department of Education in 2015 and SEC examinations into Le Cordon Bleu campus designations during 2016. The New Jersey Supreme Court permitted Sanford-Brown students to pursue litigation against CEC despite arbitration agreements, alleging deceptive practices.

In 2019, following a five-year multistate investigation, CEC agreed to cancel $493 million in student debt while denying any misconduct. That same year, Perdoceo (as CEC’s successor) paid $30 million to settle Federal Trade Commission allegations related to fraudulent lead generation methods. In 2020, whistleblower disclosures revealed possible conflicts involving Diane Auer Jones—a former CEC vice president who later served as an Education Department official overseeing regulatory affairs.

Also during 2020, despite warnings from the Department of Veterans Affairs about potential funding cuts affecting Colorado Technical Institute and American Intercontinental University, veteran enrollment at these institutions continued under the Trump Administration's policies.

These extensive legal disputes and regulatory interventions have profoundly shaped Career Education Corporation’s market position, organizational structure, and executive leadership decisions throughout its history.

Downsizing

In June 2007, Career Education Corporation (CECO) disclosed the shutdown of Brooks College locations in Sunnyvale and Long Beach, California, along with the Pittsburgh site of the International Academy of Design and Technology. These campuses ceased accepting new students, with final graduation ceremonies planned through March 2009. By February 2008, CECO intended to discontinue nine unprofitable institutions, which included several Gibbs College campuses and McIntosh College in New Hampshire, while transforming two Gibbs campuses into Sanford-Brown College sites. That same month, American InterContinental University announced a phased closure of its Los Angeles campus due to diminishing enrollment figures and regulatory difficulties.

By January 2011, CECO revealed plans to lay off 600 employees as financial challenges persisted. In November 2012, after reporting a $33.1 million net loss for the third quarter and experiencing a 23% drop in enrollment compared to the previous year, the corporation announced intentions to eliminate 900 positions—representing 7% of its workforce—and close 23 educational facilities. These closures were influenced by heightened regulatory oversight targeting for-profit colleges and shrinking market demand. Additionally, by the end of 2012, one-quarter of the faculty at the California Culinary Academy had been dismissed. Enrollment numbers continued to fall by 16% between 2012 and 2013.

Harrington College of Design in Chicago, acquired by CECO in 1999, declared in 2015 that it would cease operations due to declining student numbers, officially closing in August 2018. On May 7, 2015, CECO announced the complete closure of all remaining Sanford-Brown Colleges, with teach-out periods extending up to eighteen months. Later that year, on December 16, CECO revealed plans to shut down all sixteen U.S. Le Cordon Bleu campuses following unsuccessful attempts to sell the brand.

These closures and workforce reductions formed part of CECO’s broader strategic initiative to allocate resources toward more viable university operations amid shrinking market share and financial difficulties within its for-profit education division.

Funding

During fiscal year 2011, more than 95% of Career Education Corporation’s income was generated from student tuition financed through U.S. federal programs, including roughly $67 million annually from the US Department of Defense and Veterans Administration.

Open

• American InterContinental University (AIU)
• Colorado Technical University (CTU)
• California Southern University (acquired 2022)
• Trident University International (acquired 2019)
• University of St. Augustine for Health Sciences (acquired 2024)
• Hippo Education (acquired 2021)

Closed

• Briarcliffe College (closed 2018)
• Brooks College, Long Beach and Sunnyvale, California (closed 2007; campuses sold)
• Brooks Institute (sold 2015; closed 2016)
• Collins College (closed 2012)
• DigitalCrafts (acquired 2021)
• Gibbs College (closed 2008)
• Harrington College of Design (closed 2018)
• Le Cordon Bleu (closed 2017)
• Missouri College (sold 2015; closed 2016)
• Sanford-Brown Colleges and Institutes (closed 2017)