For-Profit College Ordered to Pay Students $1.2 Billion
Former Corinthian College students win big victory -- but is there a payoff for them?
By Kathryn Knight Randolph
March 29, 2016
Another for-profit has come under fire for its recruiting and money-making schemes. A huge victory was won this week for students that had once attended Corinthian College, according to MarketWatch. Like other for-profits that have come under federal and civil scrutiny, Corinthian advertised false graduation and job placement rates in order to attract students. After graduation, these students were unable to find employment and were saddled with oppressive amounts of student loan debt.
Unfortunately, it has become a trend in the for-profit industry – so much so that the federal government has been investigating for-profit colleges and universities as well as holding them accountable to new rules and regulations.
In addition to promising what they knew they could not deliver, MarketWatch reports that Corinthian College was found guilty of advertising X-Ray, ultrasound, radiology and dialysis technician programs that did not exist at all. They also misrepresented military affiliations by including official military seals on mailings, barred students from attending courses when they fell behind on loan payments and directly targeted lower income – and in some cases, even homeless people – to attend, knowing they were more likely to fail to make student loan payments.
The ruling, passed this week by a California judge, also found Corinthian’s subsidiaries guilty of the same behavior. These include Heald College, Everest College, WyoTech, Everest’s online programs and Everest College Phoenix, as stated by the LA Times. Together, they were ordered to pay $820 million to former students and $350 in civil penalties, as reported by MarketWatch.
But can graduates or past students of Corinthian College expect to see any of that money? Sadly – no. In May of 2015, the company filed for bankruptcy, according to the LA Times. Despite claiming $1.4 billion in assets five years earlier, the assets reported at the time of bankruptcy were only $19.2 million.
So what can students expect?
Hopefully, those that fell victim to Corinthian College’s false advertising schemes will be able to seek loan forgiveness. Many students have already been seeking debt forgiveness because the college violated the law; however, their arguments were lacking proof. Ben Miller, a senior director at the Center for American Progress, told MarketWatch in an interview that he hopes this most recent ruling will provide the evidence for those students applying for loan forgiveness.
MarketWatch states, “The Department of Education expanded options for debt relief for certain groups of former Corinthian students last year. Now, the Department is in the midst of a rule making process to clarify when and how to forgive the loans of students who accuse their schools of violating state laws when recruiting them.”
If you feel you were a victim of Corinthian College or any of its subsidiaries, California’s Attorney General Kamala D. Harris’ office has created a website for past graduates and students to learn more about the help they can receive for filing complaints about Corinthian and for seeking assistance in debt relief. Click here.
Need Money to Pay for College?
Every semester, Fastweb helps thousands of students pay for school by matching them to scholarships, grants, and internships, for which they actually qualify. You'll find scholarships like the Sallie Mae's $1,000 Plan for College Sweepstakes, and easy to enter scholarships like Niche $2,000 No Essay Scholarship, and internships with companies like Apple, Google, Dreamworks, and even NASA!