A lawsuit filed last week in a Maryland federal court is going after a giant, private for-profit higher education company.
Laureate Education is the largest internationally focused education company, serving around 850,000 students. But it has largely kept a low profile, able to avoid publicity because it runs only six schools in the U.S., but has 30 in Latin America, 24 in Europe, and 14 in Asia. Overall, it has students in 150 countries, and in 2013 it brought in about $4 billion in revenue from its then 800,000 students.
For-profit graduates 22% less likely to be contacted by employers
Last week, two students in the doctoral and master's degree programs at Walden University, which is owned by Laureate, filed the lawsuit with the intention of bringing a class-action suit against the company, alleging that its focus on marketing, profit, and rapid growth unnecessarily drag out time-to-degree, therefore forcing students to pay more tuition.
The complaint also points out that Walden nets significant profits—$101 million from 2006 to 2009—and spends much more on marketing ($2,230 per student) than on instruction (only $1,574 per student).
The university released a statement citing its low cohort default rates and career successes of alumni. It also noted the "long and rigorous process" of earning a doctoral degree.
The lawsuit, in turn, argues the master's dissertation process is "plagued by lack of institutional oversight and a complete disregard for Walden University’s own policies." Because a majority of Walden's degrees are at the graduate level, a significant portion of its student population could participate in the class-action suit.
Although a 2009 Senate report on for-profit education colleges named Laureate "perhaps the best" of the schools examined, the company has faced controversy in other countries. One of its schools in Chile lost accreditation, and students in Brazil reported a drop in their schools' quality once the education company acquired them ("The News Hole," Baltimore City Paper, 1/28; Hensley-Clancy, Buzzfeed News, 2/2).
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