Corinthian Colleges Misled Students On Job Placement, Investigation Finds

In yet another episode in the ongoing investigations of for-profit colleges, the U.S. Department of Education and California's attorney general say Corinthian Colleges consistently misled students enrolled at two campuses about their chances of getting a job.

The findings refer to Corinthian's Everest and Wyotech campuses in California as well as Everest online programs, based in Florida. For an accounting program in Brandon, Fla.,in 2010, the published placement rate was 92 percent. The true rate, according to the findings released today, was 12 percent. For a medical assistant diploma program in West Los Angeles in 2012, the advertised rate was 85 percent. The true employment rate? Zero.

Corinthian Colleges was forced to sell or close all its programs after government actions early last year, and ceased operations in April. These findings are important because they provide documentation that students were actively defrauded.

This will help make more of the colleges' students eligible for debt relief.

"Corinthian preyed on vulnerable students who are now buried under mountains of student debt," California Attorney General Kamala Harris said today. "I thank the Department of Education for joining my office to keep Corinthian accountable for their actions and providing debt relief to students."

For background on the shutdown of Corinthian Colleges, see below.

Corinthian operated colleges and training programs under the names Everest College, Heald, WyoTech and QuickStart Intelligence. This location is in Milwaukee.

Jeramey Jannene/Flickr

The long-running story of the for-profit Corinthian Colleges has entered what looks like a final phase. As our colleagues at SCPR wrote:

"Corinthian Colleges will shut down all of its remaining 28 ground campuses, displacing about 16,000 students, less than two weeks after the U.S. Department of Education announced it was fining the for-profit institution $30 million for misrepresentation."

We've been covering this story for almost a year. As I summed it up last month:

"Well, it all dates back to last July. Corinthian Colleges, which is a chain of for-profit colleges with 70,000 students, ceased operations very suddenly. And that was in response to a crackdown from the Department of Education.

"Then in November, 50 of the campuses — 85 campuses — were sold, and they weren't sold to an education company. They were sold to a loan financing company, a middleman in the student loan market. And this company, ECMC, had never operated colleges before.

"Then just over a month ago, the Consumer Financial Protection Bureau and the Department of Education announced that they were forgiving almost $500 million of these private student loans that were held by former Corinthian students."

At the same time that these official actions were taking place, a group of student debt activists and former Corinthian students have been making noise. The "Corinthian 100" student borrowers met with Department of Education officials last month. They argue that the variety of financial and legal claims made against Corinthian campuses shows that they didn't get their money's worth. They want the government to cancel their debt. And they say they'll refuse to pay until that happens.

Just because these campuses are shutting down doesn't mean that Corinthian students will automatically be off the hook for their loans. According to the Consumer Financial Protection Bureau, they'll have to apply for a federal loan discharge, and they'll still have to pay their private loans.

Although it's curtains for Corinthian, comments by CFPB's student loan ombudsman, Rohit Chopra, suggest that the heat will stay on the for-profit sector as a whole.

"We continue to urge borrowers to submit complaints with federal agencies to aid regulators," Chopra said in a statement. "The CFPB will also continue to look closely at the for-profit college sector and take appropriate steps to hold accountable those who harm consumers."

U.S. Secretary of Education Arne Duncan said recently: "We will continue to hold the career college industry accountable and demand reform for the good of students and taxpayers. And we will need Congress to join us in that effort."

For-profits are suing Duncan to stop more stringent regulation that would decide which schools can operate based on the percentage of former students who are able to pay back their loans.