BUZZFEED: Lawsuit Targets The Biggest Education Company You’ve Never Heard Of
Career College Central Summary:
In 2001, when Walden University was purchased by what would soon become the world’s largest for-profit college company, the small Minnesota college had just over 2,000 students. By 2010, it had swelled to some 50,000 students across the globe.
The company that took over Walden — and guided it through growth of 2,400% over 10 years — was not Apollo, which owns the University of Phoenix, or any of the other for-profit college giants that are traded on the New York Stock Exchange. Walden’s owner is Laureate Education, a private, internationally focused education company that also happens to be the biggest on the planet. It’s a little-known giant that tends to stay out of the public eye, even though its honorary chancellor is Bill Clinton and its investors include private equity giant KKR and financier George Soros.
But a lawsuit, filed last week in a federal court in Maryland, may change that, opening up the workings of an education company that now has some 850,000 students to a rare round of outside scrutiny.
For its vast size, Laurate’s low profile is notable, given the level of attention devoted to the education industry at large in recent years. Laureate stayed out of the spotlight primarily because it’s a private company that barely operates in the United States: It draws the majority of its revenue from Latin America, where it owns 30 schools, many of them in Brazil. It has six schools in the U.S. — the largest of which by far is Walden — 24 in Europe, and 14 in Asia. Bloomberg reported last year, in a rare look at Laureate’s operations, that its revenue topped $4 billion in 2013. Apollo and the University of Phoenix, by comparison, had 250,000 students in 2014 and brought in revenues of about $3 billion.
The new lawsuit, filed by two Walden doctoral and master’s degree students with the intention of creating a large class-action suit, alleges that the school’s rapid growth and focus on profit and marketing have created a dragged-out and misleading dissertation and thesis process, forcing students to spend more money on tuition. Most of Walden’s degrees are graduate-level, so a class-action suit could encompass a significant chunk of the school’s students.
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