Argosy University was a national for-profit chain built around psychology and behavioral-science programs, consolidated under the Argosy name in 2001 and shut down abruptly in March 2019. Assembled from older institutions — the American School of Professional Psychology, the Medical Institute of Minnesota, and the University of Sarasota — it operated roughly two dozen campuses and an online division, and at its height enrolled about 17,600 students, many of them adults pursuing graduate degrees in clinical and counseling psychology. Its collapse was not, in the end, about deceptive recruiting or inflated job numbers. It was about who owned it.
In 2017 the chain’s distressed parent, Education Management Corporation, sold Argosy along with the Art Institutes and South University to the Dream Center Foundation, a Los Angeles religious nonprofit with a history of running homeless ministries and addiction programs but no experience operating accredited universities. The Dream Center promised to convert a battered for-profit empire into a charitable one. Instead, it inherited finances far worse than projected, ran out of money within a year, and in January 2019 was placed in a federal receivership. The schools were now run by a court-appointed receiver trying to keep tens of thousands of students enrolled long enough to find a buyer.
The decisive act was financial and squalid. Federal student aid arrives at a school in a lump, and the portion that exceeds tuition — the “credit balance,” used by students for rent, food, and childcare — is supposed to be passed through to the student within days. As the Dream Center’s cash dried up, that money stopped flowing. The receiver’s accounting found that more than $16 million in students’ federal stipends and credit balances had gone undistributed; the Education Department concluded that roughly $13 million in Pell Grant and federal loan money meant for students had instead been spent on payroll and vendors. On February 27, 2019, the department cut Argosy off from federal aid entirely. Days later, on March 8, the campuses closed.
About 8,800 students were enrolled when the lights went out — graduate students weeks from clinical licensure, dissertation candidates years into a doctorate, and undergraduates who had simply chosen the wrong school. They lost not only their programs but, in many cases, the stipend checks they had been counting on to pay that month’s rent. Argosy’s failure is the rare for-profit collapse where the operator that delivered the killing blow was a charity, and the most direct injury was money taken from students’ own hands.
Le Cordon Bleu’s United States culinary schools were a chain of 16 for-profit campuses operated under a licensed brand by Career Education Corporation (CEC), the Chicago-based company that had affiliated the schools with the prestigious French name in 2000. On December 16, 2015, CEC announced it would discontinue the entire US Le Cordon Bleu operation: new enrollment would stop in early January 2016, and all 16 campuses would teach out their existing students and close by September 2017. The French parent institution — Le Cordon Bleu, the genuine culinary academy founded in Paris in 1895 — was unharmed and continues to operate around the world. What closed was the American licensee, and with it the implied promise it had been selling.
The cause was the collision of two forces. The first was regulation: the Obama administration’s “gainful employment” rule, finalized in 2014 and taking effect in 2015, cut off federal student aid to career programs whose graduates carried heavy debt against low earnings — and culinary school, with its high operating costs and its graduates working as line cooks and baristas, was squarely in the rule’s sights. The second was a corporate decision to leave the sector entirely. CEC had been retreating from career colleges for years; it tried to sell the Le Cordon Bleu campuses in 2015, failed to find a buyer, and concluded that closing them was faster and cheaper than continuing to run them under tightening rules.
The numbers explained the exit. In 2014, Le Cordon Bleu North America generated roughly $178.6 million in revenue but $70.6 million in operating losses — a business hemorrhaging money even before the gainful-employment rule threatened its aid pipeline. CEC’s CEO blamed “new federal regulations” that made the future of high-cost career schools impossible to project, and chose the orderly exit.
For students, the closure was, by the standards of the for-profit-collapse era, comparatively humane: a genuine multi-year teach-out let enrolled students finish their programs rather than stranding them mid-course. But the deeper indictment had already been entered in 2013, when CEC paid $40 million to settle a class action alleging it had oversold the value of a Le Cordon Bleu diploma — leaving graduates with large loans and $12-an-hour jobs that required no training at all.
Brooks Institute was a storied photography and film school in Santa Barbara, California, founded in 1945 by photographer Ernest H. Brooks Sr. and closed abruptly on October 31, 2016, after 71 years. For decades it was one of the most respected names in American photographic education, a place where serious photographers learned their craft. In 1999 the founding family sold it to Career Education Corporation (CEC), the publicly traded for-profit chain — the turning point from which alumni and regulators alike date its decline. Under CEC, enrollment that had reached roughly 2,300 students in 2004 collapsed to about 250 by the end, and the school accumulated exactly the record that would later define a landmark federal case: inflated job-placement claims, misrepresented costs and credit-transferability, and graduates buried in debt for a degree that did not pay.
The closure itself came not from CEC but from its successor. In June 2015 CEC offloaded Brooks to Gphomestay, a company that housed international students, and barely a year later — in August 2016 — Gphomestay’s representatives announced the school would shut on October 31, citing “changes in economic and regulatory conditions.” The notice was sudden and the wind-down was short: students months from graduating were told their school was ending, and complained that no real path to finish was provided. A hastily arranged college fair brought in other schools to recruit the stranded; it was a poor substitute for a teach-out.
But Brooks’s largest mark on history was made by a single graduate. Theresa Sweet, who finished at Brooks and applied for federal loan relief in 2016 after the school’s promised employment outcomes never materialized, became the lead plaintiff in Sweet v. DeVos — later Sweet v. Cardona — the class action over the federal government’s stalled borrower-defense process. That case ended in a 2022 settlement canceling roughly $6 billion in loans for some 200,000 borrowers nationwide. A 71-year-old photography school in Santa Barbara thus gave its name, through one of its graduates, to one of the most consequential student-debt cases in American history.
Sanford-Brown was a national chain of career colleges and institutes — training students in health care, dental and medical assisting, business, design, media arts, and technology — that traced its name to a St. Louis business college rooted in the 1860s and ended, as a brand, in 2015–2016. By the time it died it was no longer an old business college in any meaningful sense. It was a product line of Career Education Corporation, the publicly traded for-profit conglomerate that had acquired it in 2003 and run it as one of several interchangeable brands alongside Le Cordon Bleu, Brooks Institute, and Briarcliffe College.
That ownership is the whole story of its death. Sanford-Brown did not collapse because it ran out of money in a single bad year, the way an under-endowed nonprofit does. It was wound down because its corporate parent decided to leave the career-college business. By the mid-2010s the for-profit sector was under sustained pressure: deep enrollment declines, lawsuits and attorney-general settlements over deceptive recruiting, and the Obama administration’s “gainful employment” rule, which threatened to cut federal aid to programs whose graduates carried more debt than their earnings could repay. Career Education Corporation, facing that environment, chose to shrink to its two large online-oriented universities — Colorado Technical University and American InterContinental University — and to exit nearly everything else.
On May 7, 2015, the company announced it would wind down all fourteen remaining Sanford-Brown campuses and online programs over roughly eighteen months, ceasing new enrollment and teaching out the students already inside. It was, by the standards of for-profit closures, relatively orderly — a teach-out rather than a padlock — but it was still a corporate decision to abandon a school that bore a 150-year-old name, taken because the brand no longer fit the parent’s strategy. The campuses closed across 2015 and 2016, with the last few lingering into 2017.
What was lost was modest in headline terms and real in human ones: roughly 8,600 students across the affected brands, given a runway to finish but enrolled in programs and a parent company under a long shadow of fraud allegations, holding credits and credentials of uncertain value in a labor market that had learned to distrust the Sanford-Brown name. The school did not fail. Its owner simply concluded it was no longer worth keeping, and let it go.
Brown Mackie College was a national chain of small career colleges, with roots reaching back to an 1892 business school in Salina, Kansas, that was absorbed in the 2000s into the Education Management Corporation (EDMC) — one of the four largest for-profit education companies in the United States. In June 2016, EDMC announced it would stop enrolling new students at the overwhelming majority of Brown Mackie’s roughly two dozen campuses and wind them down through teach-out. By the time the dust settled, more than 20 locations were gone, the brand had effectively ceased to exist, and the handful of survivors had been folded into the wreckage of EDMC itself.
What makes Brown Mackie unusual among the for-profit collapses is that it was not, principally, killed by its own fraud. It was killed by its parent’s. EDMC had built an empire — the Art Institutes, Argosy University, South University, and Brown Mackie — that at its 2011 peak enrolled more than 158,000 students across some 110 campuses. That empire was built on the same machine every large for-profit ran: federal Title IV aid converted into corporate revenue, and aggressive recruiting to keep the conversion going. In November 2015, EDMC settled a federal False Claims Act case for $95.5 million over an illegal incentive-compensation scheme for recruiters, and separately agreed to forgive roughly $102.8 million in loans for some 80,000 students it had misled. The reputational damage, the regulatory weight, and a collapsing stock price did the rest.
Brown Mackie was the small, low-margin division at the edge of a sinking company, and it was the easiest piece to cut. EDMC said the closures reflected falling demand for Brown Mackie’s programs — medical assisting, criminal justice, business — in fields where the resulting wages no longer justified the loan debt. That was true as far as it went, but it was also the tidy explanation a foundering parent gives for shedding a subsidiary it could no longer afford to defend. The students mid-program were promised a teach-out; many got one, and many did not finish anyway.
The closure was not the abrupt, doors-locked-overnight collapse that defined Corinthian or, later, Vatterott. It was a managed wind-down — campuses stopped admitting, taught out the enrolled, and went dark in sequence through 2016 and into 2017. The mercy was relative. Students at a credit-bearing institution whose credits rarely transferred, holding debt for credentials a soft labor market did not want, were left roughly where every for-profit closure leaves its students: with the bill, and not much else.
Vatterott College was a Midwestern chain of for-profit career and trade colleges, founded in St. Louis in 1969, that ceased all operations at 4 p.m. on Monday, December 17, 2018 — closing roughly 15 campuses across Missouri, Illinois, Oklahoma, Tennessee, and beyond, and stranding about 2,300 students with effectively no notice. Some learned of the closure from a letter; some arrived to find their belongings locked inside buildings they could no longer enter. After nearly a half-century training welders, electricians, HVAC technicians, medical assistants, and cooks, the company shut down in the space of an afternoon.
The proximate cause was a turn of the regulatory tap. The U.S. Department of Education had placed Vatterott under “heightened cash monitoring” — the cautious-handling status the Department applies to financially or administratively troubled schools — and, as the company’s condition worsened in late 2018, tightened the conditions on its access to the federal Title IV aid it lived on. For a for-profit chain running on the daily flow of federal money, with no cushion, a demand for tighter terms or a letter of credit it could not post was a sentence. Vatterott had already entered a Missouri court receivership and lined up a buyer; the company said the new federal restrictions made it impossible to operate or to complete the sale.
There is a real and unresolved argument about who deserves the blame. Vatterott and its allies framed the closure as a regulator killing a fixable patient — the Department had a willing buyer in front of it and imposed conditions it knew would force a shutdown. The Department’s defenders pointed to the company’s record: three executives convicted of federal student-aid fraud in 2009, a 2014 jury award of punitive damages for misrepresenting whether credits would transfer, and forty programs that failed the federal gainful-employment test in 2017. By that reading, the heightened scrutiny was earned, and a chain that abruptly abandoned 2,300 students at Christmas was never the safe steward it claimed.
Both can be true. A company can be genuinely abused by an eleventh-hour regulatory squeeze and also be a serial bad actor whose long record made the squeeze defensible. What is not in dispute is the result: 2,300 students dropped mid-program two weeks before the holidays, with no teach-out arranged in advance, and a defunct company that would go on to owe the Department of Education more than $240 million it has never paid. The students’ only recourse was the federal closed-school loan discharge — relief that erases the debt but not the lost semesters, the lost momentum, or the careers that the credential was supposed to start.