Corinthian
is being fined for lying to students about job attainment prospects. Their
false data led students to believe if they graduated from the school, they
would have a very good chance of getting a job or being placed into a job upon
graduation. Corinthian’s job-placement
reporting was shoddy at best, and they aren’t alone:
“For-profit colleges are particularly
vulnerable to scrutiny over job-placement rates because most of them qualify
for federal student aid by preparing students for careers and because their
accreditors specifically require them to meet job-placement standards. But in
some cases, accreditors’ policies for such reporting leave a lot of room for
inconsistency.”
I find this practice highly
unethical. It hurts the student in so many ways. A for-profit college is more
expensive than their not-for profit counterparts and students are more like to
become enmeshed in student loan debt. These students have wasted resources
(time and money) that can’t be given back. They’ll have to begin anew somewhere
else and hope they can afford it. It
makes me wonder what other recruitment efforts and data are misconstrued or
falsified on all campuses.
April 15, 2015
$30-Million
Fine for Corinthian May Portend Tougher Scrutiny of For-Profits
By Andy Thomason and Goldie Blumenstyk
Washington
The U.S. Department of Education has
fined Corinthian Colleges $29.6 million for "misrepresentation of
job-placement rates to current and prospective students in Corinthian’s Heald
College system," the department said in a news release on Tuesday. The
department also said it was cutting off Title IV federal student aid to two
Heald campuses.
"This should be a wake-up call for
consumers across the country about the abuses that can exist within the
for-profit college sector," the secretary of education, Arne Duncan, said
in the release. "We will continue to hold the career-college industry
accountable and demand reform for the good of students and taxpayers."
Corinthian said that the allegations were based on flawed analysis and that it
planned "to contest everything."
The department’s readiness to impose
the fine — one of its largest ever — over allegations of falsified job-placement
rates may also be a sign that it is devoting renewed attention to such
reporting by for-profit colleges, and could have implications that extend far
beyond Corinthian.
"Clearly the department has an
increased focus on this," said Debbie Cochrane, research director at the
Institute for College Access and Success, an organization that has pressed for
tighter regulation of for-profit colleges. "Anyone who oversees
college-placement rates should also take notice," she said, referring to
accreditors, state agencies that monitor colleges, and other regulators.
"Everybody should be on the lookout for the kind of funny math that
Corinthian seems to have been using."
For-profit colleges are particularly
vulnerable to scrutiny over job-placement rates because most of them qualify
for federal student aid by preparing students for careers and because their
accreditors specifically require them to meet job-placement standards. But in
some cases, accreditors’ policies for such reporting leave a lot of room for inconsistency.
"It’s been a kind of Wild
West" in job-placement reporting, said Robert Shireman, a former
department official who now runs the organization California Competes. When Mr.
Shireman was in the department, he was involved in efforts to toughen regulations
governing "misrepresentation" by colleges in recruiting students. He
said that the department’s action on Tuesday "may be a warning
signal" that it planned to pursue more such investigations on those
grounds.
In its news release, the department said
it had found 947 false placement rates provided to students and prospective
students, as well as to accreditors and to the department.
Last year the department stepped
up its financial oversight of Corinthian Colleges, a move that unexpectedly
precipitated the for-profit educator’s collapse. It reached
an agreement with the department to sell 95 of its campuses and teach out
the rest.
The two Heald campuses were among a
dozen slated to be sold, but in recent days the college’s president, Eeva K.
Deshon, had asked for leniency from California’s attorney general, Kamala D.
Harris, who is suing Corinthian. The Sacramento Bee reported
that Ms. Deshon had said the attorney general’s office’s "unreasonable
demands" were, in effect, blocking the sale of the Heald campuses.
‘Let Off the Hook’
A spokeswoman for the attorney general
said on Tuesday that the office has no official role in the sale of the
colleges and that Heald’s request that potential buyers receive a guarantee
that would shield them from liability from the lawsuit was not acceptable.
"They want to be let off the hook
for the way they defrauded students," the spokeswoman said. And even after
a sale, some students who had entered Heald under "false pretenses"
during Corinthian’s ownership would still be enrolled. "It’s not as simple
as saying, ‘Oh, new buyers, fresh start,’" she said.
In a written statement, a spokesman for
Corinthian, Joe Hixson, called the department’s claims "highly
questionable" and "unsubstantiated," and he said they would
threaten the sale of the Heald campuses. "These unfounded, punitive
actions do nothing to advance quality education in California," he said,
"but would certainly shatter the dreams and aspirations of Heald students
and the careers of its employees."
Corinthian also maintained in its
statement that the department had taken its actions based on "faulty data
and analyses discovered and disclosed more than 18 months ago. Yesterday, we
attempted unsuccessfully to forewarn the department that it should not rely
upon data driven by a single erroneous report."
In an interview, Mr. Hixson said
potential buyers had met with officials of the California attorney general’s
office on Monday and had "received the most positive signals so far"
that the state’s case might be close to settlement. Corinthian is eager to sell
the campuses because it is facing pressure from its creditors and it needs the
money. "We’ll only be able to extend this for so long," said Mr.
Hixson, adding that the timing of the new federal fine "is very
detrimental to getting that deal done."
But the California attorney general’s
office said on Tuesday that its case was continuing. The California case
includes allegations that echo the federal ones, as well as claims that
Corinthian misused official military seals in the recruiting of veterans and
misled students about the transferability of credits.
Attorney General Harris said in a
written statement that she applauded the department for its action. She also
took the opportunity to reiterate a request that the department "act
quickly to relieve
these students from their student-loan debt burdens."
Andy Thomason is a web news writer.
Follow him on Twitter @arthomason.
Goldie Blumenstyk writes about the
intersection of business and higher education. Check out www.goldieblumenstyk.com for
information on her new book about the higher-education crisis; follow her on
Twitter @GoldieStandard; or
email her at goldie@chronicle.com.
- See more at:
http://0-chronicle.com.innopac.library.unr.edu/article/30-Million-Fine-for/229355/#sthash.7YJw6wIX.dpuf
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