Layoffs at IADT
For-profit colleges eliminate positions in response to increased government regulation
Published: April 7, 2011
Orlando's International Academy of Design & Technology (IADT) describes itself as a "private media arts college." Inside an office building shrouded by trees on South Rio Grande Avenue, students work toward associate's and bachelor's degrees in graphic design, fashion merchandising, video game production and other creative fields, and pay more than twice as much as they would at a public university to do so.
It would also be true to say, however, that IADT Orlando is a for-profit institution, concerned with earning revenue and cutting losses, much like the business that owns it, the Career Education Corporation (CEC). On Jan. 19 CEC announced it would eliminate 600 positions "across its United States operations," and on March 11, 15 staffers at the Orlando IADT campus found out they were part of that cohort. "[W]e must take this action to consolidate and streamline operations, just as other education companies have done already to remain competitive," wrote Mark Page, president of Orlando IADT, in an email to employees that day.
Enrollment has slowed at for-profit colleges across the country in the past year, and CEC, as well as other large companies, are not pointing to a lingering economic recession as the source of their woes, but rather government interference. Last October, the U.S. Department of Education announced a series of sweeping regulations of the for-profit higher education industry, mandating more extensive disclosure of information to students, harsher penalties for misrepresentation of school programs, a new compensation metric for recruiters, along with nearly a dozen more regulations, most of which will go into effect on July 1.
Because of increased federal scrutiny (which included an undercover investigation into 15 unnamed for-profit schools last year) and the tighter self-imposed admission standards, Apollo Group - which owns the University of Phoenix, the nation's largest for-profit university - said in October 2010 that it expected 40 percent fewer students to enroll the following quarter. That announcement caused double-digit percentage drops in the stocks of several large for-profit education companies, and it wasn't long before layoffs were announced: in November, the University of Phoenix said it would shed 700 employees, and on Feb. 1 Corinthian Colleges Inc. - which owns 10 Everest University locations in Florida, two in Orlando - said it would cut 600 positions, much as CEC had done less than two weeks prior.
The impact of the staffing cut at IADT Orlando is difficult to gauge - like many other for-profit schools, IADT Orlando is located in a building that only students and staff with security clearance can enter. For-profit schools are not required to disclose their internal workings to the same degree that public and private nonprofit schools are; instructors at such schools are rarely tenured, and therefore, are less likely to speak with reporters on the record. Several IADT staffers, however, confirmed that among the laid off were the chairs of the digital media and interior design departments, four full-time instructors and the head of the school library. (A March 21 email from IADT staff to students notified them of shortened library hours due to "construction.")
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