Are Colleges Profiting Too Much Off Debt-Saddled Students?
NEW YORK ( MainStreet) The Department of Education (ED) has denied applications for pending new programs by Corinthian Colleges Inc., a Santa Ana, Calif.-based for-profit college. A publicly-held company, it faces investigations by the Securities and Exchange Commission and attorneys general in California and other states.
Corinthian has also been subpoenaed for violating the 90/10 rule, an ED requirement that for-profit colleges get no more than 90% of their revenue from federal student aid programs.
The biggest threat, however, may be to its accreditation.
With the disclosure that ED denied many of Corinthian's pending program applications and heightened concern over its deceptive job placement practices, Senator Dick Durbin (D-Ill.) called on the Accrediting Commission of Career Schools and CollegesCorinthian Colleges, Inc.'s accreditor---to take action in a letter yesterday. The Board will discuss the issue at its meeting this weekend.
Citing his December 17 letter to the Accrediting Commission, Durbin stated, "You assured me that the Accrediting Commission of Career Schools and Colleges (ACCSC) is in 'the midst of an active investigation of Corinthian's conduct' and would 'carefully review this matter at its next full Commission meeting. . .'"
"I understand that meeting will begin later this week," Durbin's continued in yesterday's letter. "In light of the commitment in your letter to me and this new action by the Department of Education, your Commission can no longer ignore the misleading, fraudulent, or deceptive behavior on the part of Corinthian and its subsidiaries. Your credibility is on the line."
So is Corinthian's. A loss of accreditation could shut them down since its students would no longer be eligible for federal student aid, the funding stream that keeps Corinthian in business.
Durbin, one of the Senate's most vociferous critics of for-profit colleges, also demanded that ED investigate Corinthian's marketing practices. A December 16 letter to Department of Education secretary Arne Duncan criticized "their manipulative marketing practices which included a subsidy program for employers to hire graduates temporarily and outright lying by the company through their advertisement of numbers substantially higher than actual job placement rates."
"Given that Corinthian Colleges received nearly $10 billion over the last decade in federal student aid funding, these practices and misrepresentation to students is an egregious misuse of taxpayer dollars." He added, "I am calling on you and this Administration to work with Congress to respond more aggressively to abuses against students and the public such as those perpetrated by Corinthian."
It was not clear what the new program or course proposals made by Corinthian were and whether or not it was part of an attempt to reverse its fraught fortunes.
Established in 1995, Corinthian, one of the largest for-profit colleges in the country, offers career- oriented diploma and degree programs in health care, business, criminal justice, transportation and information technology.