California’s Attorney General Kamala D. Harris won a settlement in excess of $1.1 billion against defunct for-profit Corinthian Colleges for defrauding students with false advertising. There is a website in the linked article where students can apply for restitution. Since the corporation is bankrupt, they may never see any repayment. The entire for-profit sector is a mighty scam; they should all be tightly regulated for fraud and predatory practices. Or shut down before more students are ripped off.
The Los Angeles Times reported:
Granting a default judgment, San Francisco Superior Court Judge Curtis Karnow found that Corinthian Colleges provided untrue or misleading statements about graduates’ job placement rates, duping both students and investors, and that the Santa Ana-based company unlawfully used U.S. military seals in advertisements, among other claims.
The for-profit college operator, which filed for bankruptcy protection in May, was also faulted for advertising programs or degrees that it didn’t offer, such as training programs for X-ray and dialysis technicians, according to court papers.
The judgment found that Corinthian and its subsidiaries had unfair and unlawful debt collection practices, including barring students from attending classes if they were behind on loan payments, and that they failed to disclose their role in the “Genesis loan” program.
Corinthian Colleges, along with its Heald College business, were also faulted for misrepresenting the likelihood of whether academic credits earned at their programs could be transferred to the Cal State system, according to court papers.
In his 21-page judgment, Karnow ordered restitution of $820 million for students and civil penalties of just more than $350 million.
“For years, Corinthian profited off the backs of poor people — now they have to pay. This judgment sends a clear message: There is a cost to this kind of predatory conduct,” Harris said in a statement.
Harris filed suit against Corinthian Colleges Inc. and its subsidiaries in 2013, accusing the company of targeting low-income students with a “predatory scheme,” touting untrue job placement rates.
The attorneys for Corinthian did not appear at hearings, because they say the corporation is bankrupt and there is no one to represent.
Diane Ravitch's blog 
Maybe now we can get some accountability for the many, many members of Congress and former members of both Republican and Democratic administrations who robbed poor people, veterans and young people.
They were promoting these schools and they had 15 years of data on how the schools were a brutal rip-off to vulnerable people. They knew.
Everyone in DC who is responsible for this robbery should be held accountable. It is absolutely disgusting that this went on so long.
There are lists of the prominent, wealthy people who participated in this all over the place. Is anyone ever going to ask them if they’re ashamed of robbing low income 19 year olds? Will there ever be any accountability for this corruption?
“Former Pennsylvania governor Ed Rendell (D) was among the leaders, along with former New Jersey governor Tom Kean (R), former MacArthur Foundation president Jonathan Fanton, and Harvard professor Sara Lawrence-Lightfoot, recruited by a new industry-created group, the Lanny Davis-directed Coalition for Educational Success, to create and monitor a code of conduct for career colleges. That panel proved to be nothing more than a public relations stunt when it ultimately just disappeared.
Kaplan, one of the largest for-profit colleges and owned by the Washington Post Company, hired Anita Dunn, who had been Obama’s campaign and White House communications director.”
http://www.thenation.com/article/perfect-lobby-how-one-industry-captured-washington-dc/
The MacArthur Foundation, one of the big givers to a “digital learning” project (Gates’ orbit).
You are right. Many people, including at the US Department of Education, knowingly supported Corinthian.
As Peter Green wrote
“Corinthian has a repeatedly gotten in trouble for lying, false advertising, misrepresenting itself, and promising what it could not deliver. But the feds did not shut them down, did not demand they put a warning label on their applications, did not publicly chastise them in a manner that might have given applicants pause. And when Corinthian actually started to suffer the free-market consequences of bad behavior, the feds stepped in to protect not the students, but the investors and operators. They actually crafted a plan to allow Corinthian to draw in more students!’
Good to know, the 99% have some state court judges who value contract law. I assume delayed judgment, rendered with no possibility of compensation, can still be cited as legal precedent.
America’s change to plutocracy, is reflected in the increasing court interpretation of business/labor contracts as violable by the rich but, not by the rest of Americans.
Good for the judge, but I’m not holding my breath that the students will ever see any of that money. I’m sure they reorganized all the profitable parts of the business they could and those are now incorporated as other, immune, entities. The meager bits leftover will be distributed first to any bondholders and other rich claimants involved.
Hooray for Kamala who hopefully will be our new Senator. However, this is an award in name only since Corinthian went bankrupt. No money will end up in the hands of the student plaintiffs.
The students will never see a penny. But I bet all the lobbyists got paid!
Why are all the politicians who backed this fraud still employed? Can we get an independent investigation into this blatant pay to play? Do we still employ prosecutors, or is that just for the little people?
With the exception of a couple of state AG’s, none of the people in power did their job. Will any of them answer for that, or are they all protected because the corruption was “bipartisan”?
It was the California AG, Kamala Harris, who prosecuted this lawsuit. She is now running for Barbara Boxer’s Senate seat. Our own State Legislature is very lax at pushing for this kind of intervention. Many legislators are pro charter school and pro Education as a free market venture (as is the wannabe candidate for Governor, Antonio Villaraigosa, and all his pals such as his cousin, John Perez, his close friends Nunez, de Leon, Calderon, John Deasy, and too many more…all in love with Eli Broad’s influence and cash).
It is very important that all Californians vote for Kamala Harris, a measured, well educated attorney. She is opposed by Loretta Sanchez of the sexual pussy cat Xmas cards, who is supported by the Broad shills I mention above starting with Villaraigosa.
But wait, I thought entrepreneurialism is always good, and that we should worship these people.
Yes, and just look at how clever these entrepreneurs are. Corinthian documents described its target customer: students as “isolated,” “impatient,” individuals with “low self-esteem,” who have “few people in their lives who care about them” and who are “stuck” and “unable to see and plan well for their future.” More here–http://bit.ly/1SCryWK
Linda
March 31, 2016 at 12:24 pm
The MacArthur Foundation, one of the big givers to a “digital learning” project (Gates’ orbit).”
“Digital learning” will turn into education on the cheap for low and middle income children. It’s already happening. They have to be absolute morons not to see the obvious risk, so I can only conclude they’re thoughtless and reckless people who ignore risk.
They learn nothing from these scandals. They make the same blunders over and over and over, because no one in power is EVER held accountable.
I thought the folks at MacArthur Foundation were all geniuses.
After all, they gave the “Genius Award” to Raj Chetty(picker) and Angela Gritworth, so they must be geniuses.
Chiara’s right and, Poet’s sarcasm is correct.
All of these prominent people who attended America’s finest private colleges and universities DIDN’T KNOW the for-profits were ripping off students until 2015?
Arne Duncan was promoting the University of Phoenix as late as 2014. Didn’t he go to Harvard?
“The Justice Department and the Department of Education are coordinating on ongoing investigations of the University of Phoenix, a government official said Friday, a day after the Defense Department barred the for-profit school giant from recruiting on military bases and placed it on probation for alleged recruiting violations.”
Must be nice to be completely insulated from risk and gamble. That’s a real luxury 99% of people don’t enjoy.
http://www.wsj.com/articles/university-of-phoenix-barred-from-military-bases-1444369975
Duncan spent his time at Harvard perfecting his jump shot rather than on class work.
And it paid off: the jump shot is what got him the job at DOE.
2 pts for that one, SomeDAM Poet.
Why not apply this judgement to forgive student debt—make the loan givers pay the penalty?
See below for information about Debt Relief for students of Corinthian colleges. The loan giver was the US Government.
https://studentaid.ed.gov/sa/about/announcements/corinthian
Information on Debt Relief for Students at Corinthian Colleges (Everest, Heald, and WyoTech)
Loan Forgiveness for Corinthian Students Whose Schools Closed on April 27, 2015
For Corinthian Students Who Believe They Were Victims of Fraud or Other Violations of State Law
Forbearance and Stopped Collections
Information and Resources for Help
Get Your Questions Answered
Thanks. Here’s another site with simliar information.
http://www.forgetstudentloandebt.com/student-loan-relief-programs/federal-student-loan-relief/federal-forgiveness-programs/debt-forgiveness-for-corinthian-everest-heald-wyotech/
Well, it looks like the feds are into debt relief for some of the 99% too and not just GM, Chrysler, the big banks, and Wall Street. Does that mean some of the 99% are also to big to fail?
But: “At the time of this writing (September, 2015), the Corinthian Debt Forgiveness Program still requires that any student loan debt forgiven will end up leading to tax liabilities for the borrower.”
And: “borrowers have to individually and proactively apply for the relief—a process that requires legal savvy and documents, including transcripts, that could be difficult to obtain, especially considering the schools are no more. The finance blogger Alexis Goldstein criticized the plan for forcing students to “re-prove they were injured”: “Instead of providing broad debt cancellation to former students of Corinthian Colleges, Inc.,” she wrote, “the Department decided to require students to jump through extensive loopholes in order to apply for relief.” Meanwhile, a group of nearly 200 former Corinthian students who called a debt strike earlier this year against the DOE—and presumably helped spearhead the current initiative—says the plan doesn’t do enough to ensure students get the relief they need. According to The Chronicle of Higher Education, the group is warning that the “bureaucratically tortured” process will “revictimize” borrowers.”
http://www.theatlantic.com/education/archive/2015/06/government-corinthian-college-loan-plan-problems/395513/
But what about the OTHER for-profit colleges, Raj, such as University of Phoenix?
Threatened Out West
I have no idea about University of Phoenix. Some of my colleagues at work got advanced degrees from University of Phoenix and were promoted. I worked for a well known company which did research for the Federal Government and managed one of the three major Fusion research facilities in the world.
Unfortunately Raj, too many govt. workers, and even teachers and school administrators, use these minimalist ‘advanced’ degrees from Phoenix, National, Corinthian, etc, as a step up the ladder. It becomes clear why our cities and counties, and school districts, suffer from lack of real valid education when this occurs.
These shady schools do not produce the same degree of capable graduates as Wharton, Anderson, etc., and others from noted universities. And it has created a downward spiral that also encourages all sorts of frauds and manipulations which show up in huge salaries and perks for these sub standard, ill educated, employees who run departments of Social Services, Child Care agencies, police departments, legal aides, which society depends of for efficient and caring oversight of the community.
Southern California has had a plethora of these problems for many years. Witness as an example, the Supt. of Schools who was reaping a $650K salary in a tiny district in LA County…until the media finally exposed him. And the shambles that was in the tiny city of Bell where many of these shysters went to jail including the City Manager for outright theft from the taxpayers. Almost all of them had advanced degrees from phony schools.
When the California law permitted ‘for profit’ law schools in the late 1960s, so many sub standard lawyers were ground out that they had to get laws passed so they could advertise for clients…the result was/is all the contrived law suits we see clogging the courts. BTW, Villaraigosa went to one of these, and after taking the Bar exam 5 times and never passing, he gave up.
As yes…one more HUGE coffin nail in the Free Market philosophy of education.
Add Dr. Sharon Robinson, President and Chief Executive Officer, American Association of Colleges for Teacher Education (AACTE). “Dr. Robinson’s private business interests include service on the board of directors for Corinthian Colleges, Inc., a publically traded provider of post-secondary educational services; Management & Training Corporation, which operates Job Corps centers and correctional facilities; and Sable Uplink Communications, a company that operates independent satellite uplink communication trucks.”
She was a board of directors for Corithian and still heads a major educational organization with the approval of members who don’t care or cannot afford to break her contract.
http://crooksandliars.com/2015/05/bankruptcy-filing-corinthian-colleges
NCATE accredits Relay, which diminishes NCATE’s reputation. Accreditation is the vestige of a time, when education was something more than making money off of the vulnerable.
Linda,
I don’t know how an online program in a “college” with a faculty that has no doctorates, no research, and no library can get accredited by NCATE. Is that for real? Or April Fool’s?
According to the NCATE website, for real.
The Relay site, states that they are accredited in 8 states. Some of the states may be the result of their Middle States Commission on Higher Ed. accreditation. But, NCATE accredits Relay in at least one state.
The MSCHE accreditation is no surprise. They accredit Columbia Teachers College, home to a President, “Students Urged to Cut Ties with Pearson”.
The Relay site also states they have received recognition from the “White House…state education leaders…leaders of charter schools.”
My understanding is that the bulk of the judgment is loan forgiveness. Even if the shyster never pays a dime, it should help to deter other profiteers from creating business models around preying on hopeful students.
And Ellen Lubic is right. The bright light in all of this is Kamala Harris. I wrote about it here: http://bit.ly/1SCryWK. We need to lift up elected officials who do the right thing like this. The Senate race is barely getting any news coverage amidst the reality TV show that is the presidential election. Commenting on the story, tweeting and sharing links, and telling other reporters about it are ways of telling California’s next Senator that education voters pay attention.
Hey Karen,
As I understood it, ECMC was given collection rights on these accounts. Is this no longer a thing, then? I can attest that, when it comes to student debt, Inspector Javert’s got nothin’ on ECMC. They will hound you to your grave and then come after family members.
Yes…’part of the problem’…they can hound you into the grave.
The farce that was “tort reform” disallowed all medical bills, and all student loans to be eradicated in bankruptcy. These two outstanding charges, that really, in a civilized and enlightened First World nation, should be 1) single payer universal health care, and, 2) universal free, or low cost, education, are the most vital needs of our populace, yet the big boys in DC, including various courts, decided that We the People cannot even abrogate these loans by dying.
What a country we live in…really another example of American Exceptionalism.
The current bankruptcy law is little more than a method of maintaining a stranglehold over the “pee-ons”.
It ensures that most Americans will forever be indentured servants of the rich — that the rich are free to pee on any time they like.
One of the posters under the original article claims Dem stalwart Leon Panetta was on the Corinthian board too.
Yes, JMC…and whose boy is Panetta now?
When the Common Core and all of the Charter Chains that focus on predatory learning are eventually forced into their graves alongside Corinthian, the latter “scandal” will amount to less than 1 penny on every dollar lost to…negotiated for…or stolen by…the corporate vultures, with their henchmen Cuomo, Christie, Molloy, et all…counting their profits irregardless that they came from the backs of the poor and middle class, and their public school systems.
While the Moscowitz’s and Gulen families played direct roles in management of these education “cartels”, it was carried out by the check books of Gates, Bloomberg, the Kochs’ and Waltons, Murdoch, and Broad…and all the other billionaires who 1) despise freedom and democracy, 2) view the United States as a market, rather than a nation, 3) have perfected the Congress of Vienna attitudes of 1885 with the Congress of the Wealthy of 2016, and 4) continue to preside over the destruction of American foundations and ideals written by Jefferson, Madison, and Paine almost 2 1/2 centuries ago.
As previously pointed out, since the business world has, for the most part, gone limp over new ideas, this was the Great Train Robbery during the California Gold Rush, of the 21st Century.
Any judgment against the forces of privatization of education would be more symbolic than any action…unless the judgment includes a forfeiture of their wealth, and lifetime prison sentences for their crimes against the American people.
Gates is known as an unimaginative man. He merely expanded on Michael Milkin’s bus. ed. model, making money on the most vulnerable.
As Jobs said “He [Gates] just shamelessly ripped off other people’s ideas.”
…which is actually very ironic coming from Jobs when his own company shamelessly ripped off the ideas coming out of Xerox PARC for Apple’s GUI and the mouse.
None of these guys is actually who they want everyone to believe they are.
Apple has also relied heavily on Chinese factories that have employed what basically amounts to slave labor (including child slave labor) and was also involved in (if not behind) a scheme to discourage movement of engineers from one tech company to another — essentially an ILLEGAL wage fixing scheme which kept their salaries artificially low.
“Everest college is accredited through the west coast commission of non-accredited schools..”
“For-Profit Colleges”
Junk degrees
And crushing debts
About as sleaz
Zee as it gets
Phoenix flies
Then turns to ash
But never dies
In hunt for cash
“Bailed or Jailed?”
Wall Street pays a fine
But Main Street goes to jail
With power on your line
You’ll always make the bail
AACTE’s President and CEO (as Laura Chapman identified above), was subject of a Huffpo article, “Head of Teachers College Group sits on Board of Predatory Corinthian Colleges”. Sharon Robinson received the Bank Street College of Education, “President’s Medal of Honor”. The President, of Bank Street College of Education, is a 2008 graduate of the Broad Superintendent’s Academy. Bank Street received almost $2 million from the Gates Foundation in 2015.
Shael Polakow-Suransky, the President of Bank Street College of Education–renowned for its progressive approach to early childhood education–is a huge supporter of Common Core standards, which early childhood education experts decry as developmentally inappropriate.
The locality is the ultimate responsible party in the public sector. In the private sector, ANY entity that purports to educate should be required to carry enough insurance to compensate successful plaintiffs in actions at law. In addition, testimonial statements made by compensated or otherwise unknowing individuals should subject them to be partial defendents. It’s time to stop these rip offs!
David S.,
I think that the U.S. Department of Education should be sued for the failure of for-profit colleges. They are ripoffs and scams and they should not be accredited.
As we saw in the case of the big banks, ‘carrying enough insurance’ is far from a guarantee that a company will be able to pay those who have been defrauded.
in fact, in the case of the banks it essentially meant nothing because the “insurance” company (AIG) could not cover even a small fraction of the claims and had to be bailed out by the government.
The pattern is now well established (and even “banked on”): private companies rip off the public through blatant fraud (often while the government regulators look the other way) and the public then picks up the tab.
And the CEO’s are not only not prosecuted but actually allowed to keep the loot (all the millions they made off their scams)
What criminal CEO could ask for a better business model?
Perhaps the lawsuit could be expanded to include the “people’s party’s” betrayal of its members, as shown when, all but one Democratic senator voted for a continuation of the failures of the Dept. of Ed.
Poet…with the big banks which are “to big to fail”, our current Dem Prez and legislators protected them so deeply that now they are held harmless for all risks which, if and when they fail, are paid for with OUR tax money through FDIC protection. This legislation was introduced and passed under Obama leadership early on in the huge banking debacle of 2007-2008-onward.
Tell me that Obama (as well as Hillary) does not protect Wall Street.
Tell me that these crooks do not still hold the stimulus money which We the People provided them, even though they used it to cover their own asses at tax time, and that they do not return the residue into the billions of dollars to the govt.for the public good.
Starting with Blankfein and Dimon, they should all be the Federal Pen and not being manipulating the FED banking system.
And the Dem Prez and his DoJ leader, Wall Street lawyer Holder, did not indict any of these crooks.
It is a disgrace and it is not mentioned at all in this election season which is fraught with lies and misdirection.
Your response to my post is off target. Both you and Poet should note that the vast majority of Charter funders and mouthpieces are NOT directly connected with banking.
Follow what I said–that sponsors and mouthpieces should be vulnerable to an attack in court seeking damages. That will bring this sordid, sad, and crushing chapter in education to a crashing halt.
Please place your well founded but misplaced remarks on another subthread.
From Forbes:
Charter School Gravy Train Runs Express to Fat City
” … dozens of bankers, hedge fund types and private equity investors gathered in New York to hear about the latest and greatest opportunities to collect a cut of your property taxes. Of course, the promotional material for the Capital Roundtable’s conference on “private equity investing in for-profit education companies” didn’t put it in such crass terms, but that’s what’s going on.” …
“Charter schools are frequently a way for politicians to reward their cronies. In Ohio, two firms operate 9% of the state’s charter schools and are collecting 38% of the state’s charter school funding increase this year. The operators of both firms donate generously to elected Republicans”
http://www.forbes.com/sites/greatspeculations/2013/09/10/charter-school-gravy-train-runs-express-to-fat-city/#56388af370e5
Sadly, Corinthian is not an anomaly.
Navient’s systematic overcharging of US military students and the US DOE’s choice to protect Navient (a student loan provider) instead of the students is yet another instance.
“The Department of Education’s bank decided it was more important to protect Navient than to watch out for our military students. One of the first things that must be done is a total reform of student loan servicing to make sure nothing like the Navient disaster ever, ever happens again.” — Elizabeth Warren