Brent Hunsberger, a business columnist at The Oregonian,  writes here about the trouble with for-profit colleges.  He devotes a fair amount of his attention to Western Culinary Institute, or as it’s now called, Le Cordon Bleu in Portland.  He runs through some numbers unearthed in the class action against Western Culinary Institute and its parent, Career Education Corp. Sobering reading.

For all prospective students at a for-profit colleges and their families, I can recommend Hunsberger’s analysis as a must read.

Something interesting about the case. Counsel for Western Culinary Institute and Career Education Corp used the column to  defend the schools practices.  It makes for interesting reading. And for those closely following this case, I imagine there is some hope that I will respond.

I won’t. That’s because I prefer to try the case in the court room. Not in the press. Fair to say that we expect to dismantle these arguments and look forward to trial when we will present our evidence and argue the case.

I will share two observations. First, we push our kids and tout the benefits of education. That’s a good thing. But this for-profit education industry changes things. Going to college should not be like buying a used car. Students should be able to trust that schools are giving them accurate and complete information about what they are buying.

The other observation is that we trust the jury and that’s really all I need to say.

David Sugerman

Here’s a nice summary of the case from a KGW8 news report. The story aired yesterday on Channel 8. The link is to their web version. Kudos to Anne Yaeger at KGW who did a heck of a job putting together a substantive story so quickly. Interestingly, the students interviewed are eager about their prospects. But it’s not clear whether they realize their repayment obligations and what their likely future wages are yet, as they haven’t yet gotten out into the field.

In the story, the school continues to claim that it sells entry level training. Their ads don’t really say that, though if you look carefully through their recent catalogues, you’ll find that disclaimer. But the entry level training argument is a problem.

The problem is that they don’t tell students that their training provides no meaningful advantage in getting an entry level job in the trade. Those are jobs that are available to people who have no culinary training. And of course, when you get an entry level job off the street, you don’t have high interest debts of $40,000 or more.

What’s missing here is that higher education is supposed to be about opportunities. When students take on massive debt to pursue a college or technical degree, shouldn’t they be able to trust that the school is giving them a straight story?

David Sugerman

P.S.-If you attended Western Culinary Institute on or after March of 2006 and you want more information about the case, feel free to contact us using the links on this web page. I can’t respond to questions about the case in our comments section.

Yesterday, Judge Baldwin issued his decision allowing the consumer fraud case against Western Culinary Institute to go forward as a class action. It’s a long opinion that focuses on the details of class action rules, but it also provides information on what the students claim in the case. I’ve uploaded a pdf scan of the court’s letter opinion here: Judge Baldwin ltr opinion class cert 3 Dec 2009

This is a big victory for former students of the school. Now the case will move forward as a class action.

A few things to understand about Judge Baldwin’s ruling. He certified only the Unlawful Trade Practice Act and common law fraud claims. He denied certification on the breach of contract and unjust enrichment claims. What that means is that the class action will be limited to students who were enrolled at the Portland campus of Western Culinary Institute on or after March 2006. Students who graduated before March 2006 are not eligible to participate in the class action.

The other thing is that Judge Baldwin’s ruling isn’t a decision on the merits of the case. All that he been decided is that the students may pursue the case as a class action. It will be up to a Multnomah County jury to decide the issues at a trial that will be scheduled sometime down the road.

The next steps include getting a signed order and then starting the process of giving notice to the class. If you have not been in touch with us and you’re a former WCI student who wants more information, please feel free to contact me using the links here.

David Sugerman

For those following the proposed class action against Western Culinary Institute and Career Education Corp., we filed our opening brief on class certification today. WCI and CEC will file an opposition, and then we’ll file a reply. Judge Baldwin is scheduled to hear oral argument on the motion at a hearing in Portland on October 29, 2009.

The filing contains materials that are currently subject to a confidentiality order. For that reason, I can’t publish it at this time.  For those keeping track, this case generated rather heated criticism. I was comfortable with the decision we made to file the case. It’s fair to say that nothing that’s happened since has done anything other than to confirm my take on the case.

Not sure what to make of this write-up in the Portland Tribune on the student loan problems. The story oversimplifies, in that it talks about how the mortgage crisis has “infected” the student loan sector. Strictly speaking, I don’t think that’s true.

The student loan industry and some parts of the private education for profit industry created there own problems. It doesn’t take much digging to find a series of nested problems, including outrageous tuition Example: As the article points out, tuition of $45,000 at Western Culinary Institute. As comments following the article note, this qualifies you for a job paying $10-$12 per hour. It doesn’t take much math skill to see that that’s a real problem. Underneath are a number of questionable transactions. For example, how is it that a private lender would ever loan a student $45,000, when the student has no collateral and will graduate and qualify for the low paying jobs? Doesn’t make sense, does it?

David Sugerman

Came across this reality-based post about culinary schools from a restaurant trade insider at Austin Cantina in Seattle. It could have been written about Career Education Corp.’s (CEC) Western Culinary Institute.  Close. Actually, the author was talking about CEC’s California Culinary Academy and he was doing so in the context of a skeptical view of CEC’s new Seattle culinary program.

By way of full disclosure, I am one of the lawyers handling the proposed class action against CEC and Western Culinary Institute here in Oregon. Apart from that, I appreciate the reality view of the restaurant kitchen biz in the Austin Cantina post. Posts like this should be required reading for everyone bitten by CEC’s hype about becoming America’s next big food star.   If you’re thinking about culinary school, look carefully.  Some of the programs are great ways to get into the trade. But there are downsides with many of the programs, including profoundly expensive tuition that leaves graduates swimming in debt and unable to pay back loans with low-paying jobs available to most graduates.

David Sugerman

Great piece on the recent closing of a trade school for profit that left students holding the bag. New America Foundation’s Higher Ed Watch chronicles the closing of the Silver State Helicopters school in California. Higher Ed Watch makes it clear that this is simply one example of a much bigger problem. Looks like the California Culinary Academy case and our own Western Culinary/CEC case fit into the same framework.

Good to know that Higher Ed Watch is taking a broader view of the problems.

David Sugerman

For those following the consumer case on behalf of students and graduates against Western Culinary Institute and Career Education Corp., a copy of the amended is available for download.  Link should be below. (I’m crossing my fingers that I’ve done this correctly!)

David Sugerman

Gozzi et al v. Western Cul Inst Ltd, Amended-complaint

My co-counsel on the Western Culinary Institute case, Brian Campf, pointed this one out to me. Reading the San Francisco Weekly’s story on San Francisco’s California Culinary Academy leaves me with the odd feeling that I’ve heard this one before. If you’re following the Western Culinary Institute case, you owe it yourself to read this story.  Seems very similar to the WCI story.  I suppose that could be coincidence. Of course, both schools are owned by Career Education Corp. So maybe it’s no coincidence at all.

David Sugerman

It’s been a major torrent of calls and emails on the Western Culinary Institute case. Just a quick note if you’ve tried to reach us, and I haven’t gotten back to yet. If you attended the school, I probably don’t need to tell you that we’re getting a lot of calls. If you’re waiting for a call or email back, we’ll get to you as soon as we can finish digging out.

Meantime, if you would like to talk to one of the team members on this case, please flag us with the contact button up there in the nav bar. We’ll get with you soon. The good news is that if you think you got a horrible raw deal from Western and CEC, you’re hardly alone.

Also, we’re really interested in talking to former WCI employees about your experience at the school. Feel free to call or email, and we’ll get back with you as well.

Thanks for your patience.

David Sugerman