Aug 4, 2014
Corinthian Colleges Inc., with 70,000 students, one of the largest for-profit college operators in the U.S., has collapsed overnight. In a settlement with federal regulators, Corinthian agreed to sell 85 of its campuses and online programs, and shut down the remaining 12.
In June, while investigating Corinthian for falsifying data such as job placement figures, federal regulators put a 21-day hold on Corinthian’s access to federal aid and loans. And that was enough for this huge company to run out of cash and collapse.
The way Corinthian did business is typical for the whole “for-profit college industry.” In addition to federal student aid and loans, for-profit colleges take in 37 percent of all veteran education benefits and nearly 50 percent of all Department of Defense tuition assistance program funds.
That’s 32 billion dollars the federal government funnels to the “for-profit college industry” every year! In fact, these companies are nothing but conduits, passing those billions straight on to Wall Street “investors.”
Those billions of government dollars the for-profit colleges got year after year could have been used to extend and improve the existing public college and university systems in the U.S. Instead the politicians at the federal and the state levels starved public colleges of funds, forcing them to cut classes and turn away students. That’s how thousands and thousands of working-class students, including laid-off workers, fell prey to scam joints posing as “educational institutions.”
Today, thousands of students across the country are sitting on huge debts – some of which are to private banks at high rates, because federal loans don’t always cover the high tuition of for-profit colleges.
Corinthian and others of these for-profit colleges may go out of business in the face of this bad publicity. But their “investors” have long made their way to the bank, while thousands of working-class people are saddled with huge debts that will haunt them for the rest of their lives.