Corinthian Colleges will close its remaining 28 campuses, leaving 16,000 students without a college. The closures included campuses in California, Hawaii, Oregon, New York, and Arizona.
The U.S. Department of Education stated it would fine the company $30 million for misleading students two weeks ago, alleging that Heald College showed a pattern of falsifying post-graduation data, such as job placements. It also notified Corinthian that it would deny the company’s pending applications for its Heald Salinas and Stockton locations to participate in Title IV federal student loan programs, and gave Corinthian 14 days to respond.
Corinthian Colleges made an agreement with the U.S. Department of Education to close a dozen colleges and put 85 campuses up for sale in July of last year after the U.S. Department of Education inquired about issues such as job placement results, attendance and other records in January. Last year, the company sold most of its campuses to the nonprofit ECMC Group, but couldn’t sell its schools in California. In 2013, California Attorney General Kamala Harris filed a lawsuit against Corinthian Colleges, saying it targeted low-income people though “deceptive” advertisements.
Last November, Corinthian spokesperson Kent Jenkins told BuzzFeed News’s Molly Hensley-Clancy that it found employment for the “vast majority” of its of graduates.
Corinthian students went on strike from student loan payments from the bankrupt company recently, citing its conduct in misleading students about career opportunities after college. Although the government waived $480 million in forgiveness of private student loans, loans students owe to the federal government were not addressed.
Students petitioned the U.S. Department of Education (ED) to waive their federal student loan debt and met with officials in early April. Two weeks later, ED said it would work on a process to forgive student loans in cases where schools broke the law. This came after Senate Democrats and advocates pointed to a little-known clause in the promissory note all federal student loan borrowers sign that mentions misconduct as a defense to loan repayment. The obscure clause brought a bigger issue to light, which is that student loan debt is extremely difficult to get rid of, which is interesting given the fact that the Higher Education Act mandates there be a path for indebted students who have been misled by their colleges.
Corinthian is one of many for-profit colleges that target low-income students and misrepresents the likelihood of getting a job after college. Illinois Attorney General Lisa Madigan filed a lawsuit against Westwood College alleging that it engaged in misrepresentation about job placement for its criminal justice program as well. The Consumer Financial Protection Bureau sued ITT Educational Services, which has 135 campuses, accusing the company of urging students to take out predatory loans.
Globe University’s former dean, Heidi Weber, acted as a whistleblower, saying the company was targeting low-income students. Minnesota attorney general Lori Swanson sued Globe University as well, for the similar reasons as Corinthian — misrepresenting job opportunities after college.
The Miami Herald is digging into these abuses in a new investigative series, which mentions Kaplan University, Education Management Corporation, partly owned by Goldman Sachs, and ATI Career Training Center, which gave non-eligible students fake high school diplomas and was shut down by the U.S. Justice Department after fraud allegations. Florida Attorney General Pam Bondi, however, has acted differently than many state attorneys general suing these colleges, according to the Miami Herald’s investigation, by making settlements with the industry without any admission of wrongdoing and an offer to “retrain students,” which include Kaplan University and Keiser University.
Reports of alleged for-profit college abuses across the country make it clear that although Corinthian Colleges will shut down, predatory behavior will continue. Thousands of students are now displaced from their colleges and many more are wondering what comes next after spending years at institutions that told them an alum found a job in her field of accounting, when in reality she flipped quesadillas at Taco Bell.