National for-profit provider Corinthian Colleges plans to sell off most of its campuses, including four Everest college campuses located in metro Atlanta, and gradually close a dozen other locations.
The moves, including the Atlanta campus plans announced Monday, are part of a recent agreement with the U.S. Department of Education that allows the beleaguered corporation to wind down operations at its schools instead of immediately closing campuses, and it allows students to complete their studies or enroll at other schools. Corinthian has come under fire for accusations that it created fake jobs to boost the employment rates of its graduates, used deceptive tactics to enroll students and misrepresented that its credits are transferable to accredited colleges.
Along with the U.S. Department of Education, about a dozen state attorneys general have investigated Corinthian. Georgia’s Nonpublic Postsecondary Education Commission, which regulates for-profit schools, and the state attorney general have not joined those investigations or launched their own.
“We knew about the other states investigating (Corinthian),” said William Crews, the director of the NPEC, which regulates more than 300 institutions in Georgia, ensuring that they are educationally sound and financially stable. “We had gotten some complaints, but not on a systemic basis.”
In addition to Everest, the company also owns WyoTech schools and Heald Colleges, and it enrolls more than 72,000 students at 107 North American campuses and online. Everest has campuses in Greenbriar, Jonesboro, Marietta and Norcross that combine to serve more than 1,200 students.
The U.S. Department of Education limited the company’s access to federal student aid funds when Corinthian failed to address the ongoing concerns over the company’s practices. Corinthian, which receives $1.4 billion in federal student aid, initially warned that the penalty could force the company, which has also experienced declining enrollment at its institutions, to shut down.
The Corinthian fallout comes as the Obama administration takes a hard stance toward the for-profit industry, which relies heavily on federal aid, and has proposed regulations that would deny federal financial aid for for-profit programs whose graduates don’t make enough money to pay back their student loans. Loan default rates for students of for-profit institutions is higher than students at public and private nonprofit colleges, according to federal DOE data.
“A lot of students here don’t find jobs,” said one Atlanta-area Everest student who didn’t want her name used for fear of retaliation. She enrolled in Everest’s 10-month medical assistant program that cost $23,000, she said. “I’ve been looking for jobs, and those jobs don’t pay that much for the first year. Some of the medical assisting jobs only pay $10 an hour.”
Now, the company’s plan to sell off campuses is another area of concern. “I asked about it today and was told that it was nothing to worry about,” the student said. “It seems like to me they are trying to cover things up.”
For-profit institutions traditionally serve low-income minority students who are in their mid to late 20s who are usually high school graduates and may have tried college but dropped out, said Kevin Kinser, an assistant professor in the education department at University at Albany-State University of New York. These institutions, with shorter programs than traditional colleges, are popular with adults looking to launch careers.
“These are people saying ‘I need to make an improvement in my situation,’ which makes it that more tragic when you see the statistics that show (loan) default rates and they are in the worst shape,” Kinser said.
DaVarron Amos, a student at Everest’s Norcross campus, hadn’t heard about Corinthian’s sale plan on Monday. Amos, 20, is enrolled in a 10-month medical assistant program costing $18,000-$20,000, he said, and is three months away from earning a diploma. “My concern would be whether I could get a job with my diploma,” he said.
The U.S. Department of Education will handle most of the dismantling of the company and assist with students’ federal aid, said Crews, the director of Georgia’s for-profit regulatory agency. If necessary, the NPEC could step in to help students find other locations to complete their programs or reimburse them for nonfederal aid from a student trust funded by the institutions it regulates.
Corinthian is hoping to complete the campus sales within the next six months. The campuses could likely be sold to existing for-profit operations, industry investors have said.
In the meantime, operations are continuing as they have in the past, company spokesman Kent Jenkins said Monday.
“The goal from the beginning is to make sure that all our students are able to continue their education without any disruption, delay or additional costs,” Jenkins said, “and this process achieves that.”
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