In summer 2005, Daniel Vasquez was trying to figure out what to do with his life.

The 19-year-old never graduated from high school but had worked as a line cook at a golf course café and liked the idea of running his own kitchen. So he called Le Cordon Bleu culinary school, which he’d seen advertised on TV.

The man on the phone told him that a degree from the Pasadena school would launch a career as a star chef, he recalled. And during his subsequent campus tour, he was granted admission after completing a questionnaire, computer test and interview – and urged, he said, to sign up that day to lock in lower tuition.

But today, Vasquez has little to show for his 18-month program – other than $80,000 in student debt.

Far from becoming the next Gordon Ramsay, Vasquez is unemployed at age 26. What work he has been able to find are entry-level jobs chopping vegetables for as little as $10 an hour.

Now, he is one of about 950 former students – out of 8,000 who attended from 2004 to 2009 – who have sued the Pasadena campus of Le Cordon Bleu, alleging the school misled them about employment prospects.

“For what they pitched, the degree doesn’t mean anything at all,” Vasquez said.

In addition, 22 former recruiters have alleged in a separate fight that they were pressured to make outsized promises to prospective students and enroll students no matter what.

Last year, Le Cordon Bleu’s San Francisco campus settled a similar lawsuit filed by former students for $40 million. Adding to its troubles, the chief executive of its Schaumburg, Ill., parent company, Career Education Corp., resigned in November, after a New York attorney general’s investigation uncovered inflation of job placement rates at some of its health education and art schools.

There are 17 Le Cordon Bleu campuses in the United States, making it the largest culinary school chain in the country.

Parent company Career Education declined to comment.

But it’s not just the company that’s under siege. The lawsuits and investigations come during a time of increased scrutiny of for-profit schools over recruiting practices and high default rates of student loans. That scrutiny led to new federal regulations last year that are intended to limit the debt students take out.

“The sentiment has shifted against these schools, and that had a lot to do with how large the culinary school settlement was in San Francisco,” said Trace Urdan, an analyst in the San Francisco office of Wunderlich Securities.

Boom years

For-profit schools have exploded over the last decade, currently enrolling about 12 percent of all college students, up from 3 percent in 2000, according to the Department of Education.

But the industry has drawn increasing attention from the government for its high student-loan default rate – nearly half of all such defaults come from for-profits. Critics allege the schools lure low-income students to take out large loans regardless of their job prospects or ability to repay, noting the industry posted record profits and revenue through the downturn. For example, the net income of Le Cordon Bleu parent Career Education rose 160 percent to $158 million between 2008 and 2010.

U.S. Senate hearings on the subject were held the last two years, and in August, the Department of Justice, California and three other states sued Pittsburgh’s Education Management Corp., which operates several for-profit chains, including the Art Institutes. The lawsuit charged recruiting violations and sought reimbursement of $11 billion in financial aid. Prior to that, dozens of whistleblower lawsuits were filed against for-profit schools, including one that the Apollo Group Inc., the parent of the University of Phoenix, settled for $78.5 million in 2009.

In June, the Obama administration issued new regulations, setting debt repayment and student debt-to-income ratio requirements for for-profit schools receiving federal financial aid.

It’s this climate that has given some leverage to aggrieved former students. Last year, Le Cordon Bleu settled a class-action lawsuit by agreeing to give tuition rebates of up to $20,000 each for the 8,500 students who attended its San Francisco culinary school between 2003 and 2008.

“Historically, these kinds of consumer-driven suits have not really gone very far,” said analyst Urdan. “But the culinary school case was the first big exception.”

In fact, the success of the San Francisco lawsuit has even spawned student-driven lawsuits against schools outside the for-profit sector. Former law students struggling in the depressed job market have filed similar lawsuits against 15 law schools in the last year, including New York Law School and L.A.’s Southwestern Law School – both independent non-profits – charging them with misleading applicants about job prospects.

One of the plaintiff’s attorneys behind the spate of lawsuits against law schools, David Anziska, has even stated publicly he drew inspiration from the Le Cordon Bleu lawsuits.

Anziska could not be reached for comment, but Michael Volpe, an attorney defending New York Law School, also noted similarities with the culinary school cases.

“These individuals aren’t complaining they weren’t trained properly. They’re complaining essentially that they didn’t get the jobs they wanted to get,” said Volpe, who believes the recession underlies both cases.

But for Vasquez and the hundreds of former students of Le Cordon Bleu’s Pasadena school, it was something more serious than just the downturn or unfulfilled hopes.

They say that admissions officers told students flat-out they would become chefs and make salaries of $40,000 a year or more, making it possible to pay off tuition and fees of $45,000 to $48,000 for the 18-month program.

They also allege recruiters told them the school was highly selective when, in fact, entrance requirements were minimal. Once admitted, the students say that they were pressured to enroll as soon as possible, and were told classes were filling up.

“They made it seem like there were lines around the block to get in,” Vasquez said.

Alana O’Shea, another former student listed in the lawsuit, said she also faced aggressive recruiting tactics from her admissions officer.

“He almost made it seem like he had to approve me to get into the school, but there wasn’t any real test to get in,” O’Shea said.

She ended up taking out the loans and attending the school. Upon graduation in 2006, she worked an entry-level job at a salad station for $10 an hour, but now has moved her way up to become a manager at a restaurant in Malibu making $17 an hour. At age 31, she has nearly $80,000 in student debt.

Management pressure

The students’ allegations have been echoed by a group of former recruiters and admissions officers in a separate lawsuit against the Pasadena campus over working conditions and unpaid wages. They say the pressure from upper management to enroll students was intense – that they were required to meet quotas of 120 outbound calls a day, six student interviews per day and four enrolled students per week. It further alleges that recruiters were promised $400 bonuses for each enrolled student who graduated, and told by management that “as long as they have a pulse, enroll them.”

In court, Le Cordon Bleu has denied there was any wider advertising scheme, that admissions officers were trained never to promise potential salaries or positions and that students were given documents clearly outlining realistic job prospects.

“As might be expected, whether students got the jobs they supposedly were promised varied among the class members depending on expectations, the job market and individual efforts,” the school stated in a court motion.

Then there’s the question of whether a degree from Le Cordon Bleu actually helps. It’s named after the famous French cooking school but is not an extension of it. Career Education only has a marketing arrangement with the French school allowing it to use the name in the United States.

Restaurant consultant Jerry Prendergast of Culver City said a culinary degree has some value, but is weighed far less than experience by potential employers.

Many kitchens are filled with culinary school grads, but the proliferation of culinary schools and TV cooking shows has created a problem of expectations among the labor force, he said. He recounted placing a culinary school graduate at one local restaurant, only to find months later the person had quit due to a lack of creative input.

“The problem is you get students who come out of those schools who are under the impression that they’re now chefs,” he said. “They don’t want to prep. They want to come up with ideas for specials. I’m not sure the schools actually say to them how hard life is going to be when they get out.”

Changes

Le Cordon Bleu has already made changes in response to the lawsuits, including making more disclosures about the kinds of jobs a graduate might expect and rolling out a shorter program that charges tuition of $17,000.

It’s not only that school, but the entire industry that’s getting an overhaul. Though some of last year’s regulations were scaled back after intense lobbying by the industry, the new rules and added scrutiny have led to changes in how for-profit schools operate. Most schools have changed recruiter compensation and tightened admissions standards.

Last year saw double-digit percentage drops in enrollment for many schools, as well as drops in earnings and revenue. The most recent quarterly report for Career Education showed a 12 percent year-over-year drop in enrollment at all its schools and a 32 percent drop in revenue-per-student at its culinary schools.

“You sort of just ripped up how a lot of these schools were enrolling students,” analyst Urdan said. “We’re in a period right now where we’re trying to understand what the new normal might be.”

As for the lawsuit against the Pasadena campus, the outcome figures to be closely watched. Another big settlement could further encourage student-driven litigation against other schools, just as the San Francisco case triggered a wave of law school suits.

“It certainly emboldens people,” said Michael Geibelson, a partner at the Century City office of Robins Kaplan Miller & Ciresi LLP who reviewed the case for the Business Journal. “Success in one case can be the trigger for lots of other class-actions, regardless of merit.”