<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): SEPTEMBER 27, 1996
COMPUTER LEARNING CENTERS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-26040 36-3501869
(State of other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
11350 RANDOM HILLS ROAD
SUITE 240
FAIRFAX, VIRGINIA 22030
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 359-9333
----------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
Computer Learning Centers, Inc. (the "Company") announced today that late
on Friday, September 27, 1996 it received notification from the U.S.
Department of Education ("DOE") that its Chicago Learning Center was
unsuccessful in its appeal of the 1991 and 1993 student cohort default rates
and as a result has been terminated from the Title IV Federal Family
Education Loan ("FFEL") and the Federal Pell Grant programs.
The DOE also notified the Company that it may apply to restore eligibility
in the FFEL program on October 1, 1997. As is customarily the case with
default rate appeals, the DOE provided no additional data concerning the
reasons the appeal was unsuccessful.
The loss of eligibility affects only the Chicago Learning Center which
accounted for approximately 11% of the Company's revenue for fiscal 1996. The
Company's Chicago Learning Center remains eligible to participate in the
Federal Supplemental Educational Opportunity Grant program and the Federal
Perkins loan program.
The Company also announced that it is initiating legal action against the
DOE to compel the recognition of its 1994 cohort default rate of 20.1% as
representing the most recent cohort default rate data. The DOE issued the
1994 rate to the Chicago Learning Center in June 1996, but maintains that the
rate is not final until published by the Secretary of Education later this
year. Use of the 1994 cohort default rate would mean that the school's three
most recent cohort default rates were not all over 25%, thereby restoring the
Chicago Learning Center's eligibility to the FFEL and Pell Grant programs.
The Company is also challenging the DOE's denial of the Chicago Learning
Center's appeal, which was based on errors in the servicing of student loans
by lenders and guaranty agencies. Under federal law, improperly serviced
student loans may not be charged against an institution's calculation cohort
default rate.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS
A list of exhibits filed as part of this report is set forth
in the Index to Exhibits, which immediately precedes such exhibits and is
incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMPUTER LEARNING CENTERS, INC.
By: /s/ Charles L. Cosgrove
____________________________
Charles L. Cosgrove
Chief Financial Officer
Dated: September 30, 1996
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
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<S> <C>
99.1 Press Release Dated September 30, 1996
</TABLE>
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EXHIBIT 99.1
(BW)(COMPUTER-LEARNING-CTRS)(CLCX) Computer Learning Centers Announces
Regulatory Decision.
FAIRFAX, Va.--(BUSINESS WIRE)--Sept. 30, 1996--Computer Learning Centers,
Inc. (CLCX; NASDAQ) announced today that late on Friday, September 27, 1996
it received notification from the U.S. Department of Education ("DOE") that
its Chicago Learning Center was unsuccessful in its appeal of the 1991 and
1993 student cohort default rates and as a result has been terminated from
the Title IV Federal Family Education Loan ("FFEL") and the Federal Pell
Grant ("Pell") programs.
The DOE also notified the Company that it may apply to restore eligibility
in the FFEL program on October 1, 1997. As is customarily the case with
default rate appeals, the DOE provided no additional data concerning the
reasons the appeal was unsuccessful.
The loss of eligibility affects only the Chicago Learning Center which
accounted for approximately 11% of the Company's revenues for fiscal 1996.
The Company's Chicago Learning Center remains eligible to participate in the
Federal Supplemental Educational Opportunity Grant ("SEOG") program and the
Federal Perkins ("Perkins") loan program.
Reid Bechtle, President and Chief Executive Officer, said, "While we are
disappointed in the loss of FFEL loan and Pell Grant funding eligibility, we
intend to keep the Chicago Learning Center open at our downtown Chicago
location and we feel positive about our ability to operate the Chicago
Learning Center in a self funding mode until we can reapply on October 1,
1996, for reinstatement into the FFEL program. We will continue to provide
our Chicago students with financing options comparable to what they would
have received under traditional federal loan programs."
Bechtle continued, "This will be accomplished by combinations of CLC
funding and funding from private sources, as well as by shifting to the
Chicago Learning Center in accordance with applicable law, SEOG and Perkins
Loan funds presently allocated among our ten other Learning Centers."
Bechtle added that the law requiring an institution to cease participating
in the Federal Pell Grant program if it exceeds the cohort default rate
limits for participation in the FFEL program expires on June 30, 1997, and
that he expected the Company to seek resumption of Pell Grant program
participation immediately thereafter.
The Company also announced that it is initiating legal action against the
DOE to compel the DOE to recognize its 1994 cohort default rate of 20.1% as
representing the most recent cohort default rate data. The DOE issued the
1994 rate to the Chicago Learning Center in June 1996, but maintains that the
rate is not final until published by the Secretary of Education later this
year. Use of the 1994 cohort default rate would mean that the school's three
most recent cohort default rates were not all over 25%, thereby restoring the
Chicago Learning Center's eligibility to the FFEL and Pell Grant programs.
<PAGE>
The Company is also challenging the DOE's denial of the Chicago Center's
appeal, which was based on errors in the servicing of student loans by
lenders and guaranty agencies. Under federal law, improperly serviced student
loans may not be charged against an institution's calculation cohort default
rate.
Bechtle continued, "We do not believe that this changes the fundamentals of
the business or the Company's growth strategy. We have always operated very
conservatively and expect that any financial impact arising from the DOE
decision can be offset by the strong performance at our other core centers,
new centers, and Advantec Institutes."
Computer Learning Centers provides information and computer-related
education and training at 11 Learning Centers in the United States. The
Company designs programs and courses to meet current information technology
education needs, offering instruction in technologies such as client server,
databases, networking and object-oriented programming.
The Company's management will be available on a conference call at 9:00
a.m. EST for questions concerning the Chicago Learning Center.
Participants may dial 1-800-230-1074 and after identifying themselves and
their company affiliation will be admitted to the call.
EDITOR'S NOTE: This release contains forward looking statements that are
subject to risks and uncertainties, including but not limited to the impact
of government regulation and competition and other risks detailed from time
to time in the Company's filings with the Securities and Exchange Commission.
CONTACT: Computer Learning Centers, Inc.
Charles Cosgrove, 703/359-7702
or
The Equity Group
Devin Sullivan, 212/836-9608
Tamra Ehlin, 212/836-9607
(END)
