Under investigation for falsifying job placement rates, for-profit Corinthian Colleges will sell 85 campuses and close 12 others. The national company runs Everest, WyoTech and Heald career colleges.
The Department of Education had put a hold on Corinthian’s access to federal student aid. Under an agreement reached last week, the DOE will provide $35 million in student aid funding to provide time to sell or close the colleges. Corinthian’s finances will be monitored closely by an independent auditor.
Corinthian receives $1.4 billion in Pell grants and federal student loans each year, which represents 85 percent of total revenues, reports the Miami Herald.
The company is facing charges in several states, including Florida and California, of exploiting and misleading low-income students.
Florida’s community colleges, which are some of the best in the nation, often offer similar programs at a far lower price. For example, Everest’s Pompano Beach location charges about $15,000 in tuition for a medical assisting diploma; at Broward College, the same program costs $1,698 for in-state students.
The Florida attorney general’s investigation of Everest has produced 100 pages of complaints, reports the Herald.
The California attorney general’s lawsuit cited internal Corinthian documents that described its students as “isolated” individuals with “low self-esteem” who have “few people in their lives who care about them.”
The California lawsuit states “the placement rates published by [Corinthian] are at times as high as 100 percent, leading prospective students to believe that if they graduate they will get a job. These placement rates are false and not supported by the data. In some cases there is no evidence that a single student in a program obtained a job during the time frame specified in the disclosures.”
In some instances, the suit says, Corinthian paid temp agencies to give its graduates short-lived jobs — so it could inflate the job placement numbers, and maintain the accreditation required to receive federal aid.
Corinthian’s enrollment has fallen to 72,000 students, estimates the DOE.
National Journal has more on the fall of Corinthian.