According to an agreement reached this week with California Attorney General Kamala Harris, for-profit Corinthian Colleges must clearly spell out its financial situation online for current students.
The corporation recently announced its plan to sell 85 of the 107 schools it operates, as well as closing 12 others. Harris claims Corinthian continued to recruit new students in a “false and misleading way” by not making this information clear. The colleges also must make it clear to its military students that California campuses may no longer receive GI Bill benefits.
“Corinthian Colleges has voluntarily – and without direction from the attorney general’s office – worked to address student concerns,” Corinthian spokesman Kent Jenkins said in a statement. “We have been providing clear disclosures regarding the pending sale of our schools and we will continue to do so.”
Documents just released reveal what the Department of Education actually knew concerning Corinthian Colleges’ financial situation, despite its “didn’t know” attitude.
According to new documents that have surfaced, the DOE may have been well aware of the dire financial circumstances facing the company. The department had asked the company for an update on their financial situation in a May 13 letter, although it is not clear if those updates were ever received.
Trace Urdan, a senior analyst at Wells Fargo, stated that the sending of that letter “definitely mitigates the idea that they didn’t know what they were doing. They apparently knew enough to be asking the right questions.”
Last month, the DOE put a 21-day hold on Corinthian’s access to federal student loans, which make up 85% of the company’s revenue. This move basically put an end to Corinthian colleges in California.
According to officials at the Department of Education, they “did not know the cash situation” and were “surprised” at the outcome.
As for the Canadian campuses, it’s “business as usual.”
“The entire plan is to sell the Canadian division as an ongoing enterprise,” said Everest Colleges Canada president Rupert Altschuler. “We are still accepting new students, of course, and we continue to teach all the existing students.” Altschuler said that many stakeholders have already expressed “healthy interest” in the Canadian division.
According to James Marshall Crotty for Forbes, the owner and name may change, but the day-to-day practices, which include the falsifying of information in an effort to drive up admissions, could still remain the same. Altschuler told CTV News Toronto, “At some miraculous point of time, there will just be a change of ownership. But when it comes to the day-to-day operations, it will have no impact whatsoever.”
While Corinthian campuses are sold off in the US, it is a concern that the founders will follow the example set in Canada and simply begin a new campus in another location with another name.