Thousands of students who took out tens of thousands of dollars in student loans to attended San Francisco’s California Culinary Academy, one of 18 cooking schools in the Le Cordon Bleu for-profit college chain, may be getting some of their money back.
Under a pending $40 million settlement in state court, Career Education Corp., Le Cordon Bleu’s parent company, has agreed to offer rebates of up to $20,000 to approximately 8,500 students who attended the academy between 2003 and 2008.
In a class-action lawsuit, former students of the cooking school accused it of misleading them about the value of a culinary education and their job prospects after graduation. The students alleged the for-profit school defrauded them with promises of high-paying jobs and encouraged them to take on crushing debt from student loans for expensive programs but provided them with no more chance of finding a high-paying culinary job than someone who didn’t go to culinary school at all.
Although the school’s website says 48 percent to 100 percent of graduates find work in their field of study or a “related field,” critics say that the school purposefully uses methodology that includes jobs that don’t pay much more than minimum wage and that don’t require a formal culinary education.
The academy’s tuition ranges from $21,000 for a certificate in pastry and baking arts to $43,000 for an associate degree in culinary arts, not including books, supplies, or room and board.
“They just oversold it and pushed it. They made misleading statements to lure you in,” said Emily Journey, 26, a plaintiff in the class-action lawsuit against the California Culinary Academy.
In 2004, Journey was convinced by academy recruiters to take out $30,000 in student loans to pay for a seven-month program in pastry and baking arts. After graduation, the only job she was able to find paid $8 an hour to work the night shift at a bakery in Oregon. It was a job that “anyone could have gotten without a culinary certificate,” Journey said.
Journey said she has abandoned her dream of opening her own bakery and will attend community college to become a nurse or dietitian. If the settlement money doesn’t come through, she said she’ll be paying for her culinary certificate for another 15 years.
“It is a ridiculous business decision to attend one of these schools,” said attorney Ray Gallo, who represents Journey and other plaintiffs suing the California Culinary Academy. “The whole thing doesn’t make economic sense. They know it and they don’t tell you” (“Students Sue Schaumburg-Based Le Cordon Bleu,” Daily Herald, Sept. 6, 2011).
Cooking Schools Settle Three Student Loan Lawsuits Alleging Illegal Practices
For-profit colleges came under fire in 2010 after an undercover federal probe found widespread fraud in recruiting, admissions, and financial aid departments at all 15 schools it investigated. Over the past decade, enrollment at for-profit schools has surged, fed by easily-obtained federal financial aid, including federal grants and federal student loans, that makes up as much as 90 percent of revenue at many for-profit schools. At what was then 16 Le Cordon Bleu cooking schools, enrollment increased over 64 percent between 2008 and 2010, from 8,400 to 13,100.
Although students at for-profit schools make up just 12 percent of all college students, they make up 43 percent of all federal student loan defaults, according to a recent report by The Education Trust.
“It’s a business predicated on volume, not quality. How many students can you get to sign on the dotted line?” said Jose Cruz, vice president for higher education policy at The Education Trust. “It’s a debt that takes over their financial life.”
Career Education denies its recruiting, marketing, and advertising practices are illegal. However, spokesman Mark Spencer said that the Le Cordon Bleu’s schools recently changed their policies to “ensure that students understand that we are not promising any specific job outcomes or salaries.”
The company said that while it’s cooking schools provide “a much-needed foundation” for people to be successful, it agreed to settle the California Culinary Academy lawsuit, as well as lawsuits against two other Le Cordon Bleu schools — the California School of Culinary Arts in Pasadena and the Western Culinary Institute in Portland — because they were too expensive to litigate and were distracting to employees.