California college students displaced amid alleged financial aid scam
April 27, 2015
A popular for-profit college chain is shutting down than two dozen campuses and displacing more than 10,000 California students. [LA Times]
Orange County company Corinthian Colleges Inc., which has operated the Everest, WyoTech and Heald college systems in California and other states announced the closures Sunday, giving almost no notice to students and employees. The closure of the campuses follows five years of government investigations into the college chain, litigation with the state of California and a $30 million fine imposed earlier this month by the U.S. Department of Education.
State and federal investigators accuse the college chain of falsifying job placement statistics in order to profit off a boom in government-offered financial aid that occurred during the recession. Likewise, the college system allegedly paid temporary employment agencies to hire students after graduation.
Corinthian Colleges’ profit nearly doubled to $1.75 billion from 2007 to 2011. As many unemployed workers sought financial aid and returned to school, the college chain hiked tuition, investigators say.
The Department of Education cut off Corinthian Colleges’ access to student loans last summer. The closure of the individual campuses was expected for months, even though the company waited to inform students and employees.
Students at the various campuses were working on associates degree, often in technical fields, like criminal justice. The schools are comparable to community colleges.
Displaced students can now attempt to transfer their units to other colleges. They can also seek student loan forgiveness from the federal government.