Politico reports this morning that the giant for-profit charter chain Corinthian College is in deep financial trouble and is under criminal investigation as well:
“MORE CORINTHIAN INQUIRIES: Corinthian Colleges is facing two more criminal investigations, the dismantling for-profit giant reported in an SEC filing late Friday [http://bit.ly/1mwDAFi]. The company disclosed a federal grand jury subpoena in Florida related to employee misconduct and the return of student aid funds, plus one in Georgia requesting information on job placement, admissions, attendance and graduation rates. The subpoenas follow last week’s news that the Consumer Financial Protection Bureau is suing the company for nearly $569 million over an “illegal predatory lending scheme: http://1.usa.gov/1oW68U3”
For a real eye-opener, read the charges made against this for-profit corporation by the Consumer Financial Protection Bureau. This “illegal predatory lending scheme” is stunning in its scope. The administration and Congress should regulate these predatory institutions or put them out of business. Unfortunately, Congress has held off because the industry hired the top lobbyists from both parties to fight needed regulation. If it were up to me, I would ban for-profit education, including for-profit charter schools and colleges. Many, most, are worthless diploma mills whose purpose is profit, not education. Why urge young people to get a diploma when the choices include places like this one?
Diane Ravitch's blog 
Dr. Ravitch – You described this organization as a “giant for profit charter chain.” Things I’ve read say that this very bad company was not operating charters. It was offering college and university programs.
No question that this was a bad company; no question that there are some people in the k-12 part of public education who are not offering quality programs, products, services, etc.
But isn’t it correct that in this case Corinthian College were a higher education institutions, not K-12 charter public schools?
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In my view for-profit universities and for-profit K-12 schemes have the same goals – mega profits for the shareholders.
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LLC1993,
What about non-profit charter schools like Walton Rural Center Charter school?
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Doesn’t matter. They are being funded and bankrolled under the same large umbrella. It doesn’t do any damage to the real owner(s) of the mega business.
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Here’s one of the congressmen, but there are a lot of them:
“Legislation designed to prevent for-profit colleges from gaming the federal aid system and exploiting veterans died within 15 minutes of being introduced earlier this month.
Kline receives more campaign funds than any other member of Congress from the parent company of the University of Phoenix, a for-profit education giant. In an email, Kline’s spokesman, Brian Newell, said the $48,100 in contributions from the Apollo Education Group since 2011 did not influence the congressman’s decision.”
https://beta.cironline.org/reports/legislation-to-close-loophole-in-gi-bill-college-aid-dies-in-minutes/
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What’s even more disheartening is the fact that the head of AACTE (representing the non-profit teacher colleges) is making and additional $160,000 per year serving on Corinthian’s board. Who is serving who here?
http://www.huffingtonpost.com/davidhalperin/head-of-teachers-college_b_5078769.html
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Sad.
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And here’s another long list of very prominent names:
Anita Dunn, a close friend of President Obama and his former White House communications director, worked with Kaplan University, one of the embattled school networks. Jamie Rubin, a major fund-raising bundler for the president’s re-election campaign, met with administration officials about ATI, a college network based in Dallas, in which Mr. Rubin’s private-equity firm has a stake.
A who’s who of Democratic lobbyists — including Richard A. Gephardt, the former House majority leader; John Breaux, the former Louisiana senator; and Tony Podesta, whose brother, John, ran Mr. Obama’s transition team — were hired to buttonhole officials.
And politically well-connected investors, including Donald E. Graham, chief executive of the Washington Post Company, which owns Kaplan, and John Sperling, founder of the University of Phoenix and a longtime friend of the House minority leader, Nancy Pelosi, made impassioned appeals.
In all, industry advocates met more than two dozen times with White House and Education Department officials, including senior officials like Education Secretary Arne Duncan, records show”
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“The subpoenas follow last week’s news that the Consumer Financial Protection Bureau is suing the company for nearly $569 million”
I’ll believe they’ll actually collect the money when I see it.
If you read the CFPD complaint you will find that Corinthian had agreed to set up a 30 million dollar fund to repay students for classes they won’t be holding, and as of the date of filing of that complaint (last week) they haven’t done so. This 30 million “agreement” was announced with great fanfare in national media. The CFPB complaint says they didn’t set it up. Where’s the 30 million dollars we were told they would be paying?
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Corinthian was “managed” by ex-executives from credit card companies, Princess Cruises, medical accounting and such. See for yourself. The stock price is at .14, Image showing the huge drop is depicted here. http://investors.cci.edu/stockquote.cfm
if you are curious about the scammers, check here http://investors.cci.edu/directors.cfm You will also see the other “private business investments” of Dr. Sharon Robinson, a Trustee since 2011 long enough to know the level of corruption. AACTE should call for her resignation as CEO of that organization
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As a community college instructor, I tell my students that there are three kinds of colleges: public, private non-profit, and private for-profit.
I have had many colleagues who taught at community colleges while also teaching at for-profits and others at non-profits.
One of them teaches at a nationally known private, non-profit school.
I asked him once what he does differently there and he just laughed.
“I don’t have time to make up a different class for them than I give students here. They just pay more for it.”
Students literally get the same instructors no matter which kind of school they go to.
If that premium price for an Ivy League or at least nationally recognized school is worth anything, it’s for the wealthier friends you make that you can network with later.
I haven’t figured out what the benefit is that justifies the cost of for-profit colleges.
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Mike,
I am paying for an elite private university primarily to get access to the other students there. It is the students that make a class.
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Having taught at both a public university and a private university, I found the attitude very sad that an instructor doesn’t “have time” to prepare for two different classes. That does not sound very professional.
I’ve also attended both public and private colleges. I found great instructors in both institutions. But at the private colleges, there was a greater interest among faculty in teaching undergrads, The incentives at many for public “research” institutions is not to work hard on being a great teacher.
There is more of an emphasis on teaching undergrds at many community colleges such as the one that it sounds like Mike teachers at. Hope he feels that encouragement.
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In public and community colleges, the approach is to weed out students. It is sink or swim. Very little support and plenty of impersonal, all or nothing assessment. There is little room for learning disabilities or mistakes. Private colleges are more likely to assist students and tolerate failure. You just have to be able to afford it.
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Mathvale, Education Trust has found that some colleges and universities work hard to retain their students. Others are, as you suggest, not very focused on student retention.
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