The greatest ship disaster in American history is probably one of the least known. The river steamboat Sultana, laden with over 2,400 passangers, blew her boilers and sank with the loss of 1,800 lives on April 27, 1865. That was more than the number who perished on the Titanic but the story of the Sultana was overpowered by more dramatic contemporaneous events, notably the assassination of Abraham Lincoln and the manhunt for John Wilkes Booth. Everyone remembers the Lincoln assassination. Nobody remembers the steamboat.
In similar fashion, the story of the Corinthian College closures in California have been eclipsed by continuing race riots in Baltimore. The narrative in Baltimore has all the drama and visuals, but the saga of Corinthian College is in its own way as important as events in Maryland, being about the wholesale destruction of the futures of tens of thousands of young people — or whether they ever had any at all.
The Corinthian network of schools, based in California has shut down Heald College, Everest College and WyoTech College leaving 16,000 students across six states “with questions about how they would finish their educations and how they would pay off the loans that they had taken out to ‘get ahead.’” But perhaps “education” isn’t exactly the right word for what they were offering. The system is being closed in response to accusations of being a diploma mill that encouraged students to take out government student loans amounting to over a billion dollars. This enormous debt enabled the hopeful to pay Corinthian fees in exchange for instruction of questionable quality that left many unemployable but loaded with student loans. The LA Times relates the case of one aspiring dental assistant.
Julio Colis, 19, said he was worried about the $10,000 in loans he took out to finance his education. He was studying to be a dental assistant, and said his plan B was to go to East Los Angeles College.
“I’m worried about the debt we have, like what we would have to pay on it,” he said. “I had talked to one of the counselors before about getting a bad feeling about this place and she said, ‘Don’t worry.’”
“Don’t worry.” These are famous last words that often signify you’re about to have the rug pulled out from under you.
The school knew it was closing but never told students or helped them get into other schools. It goes to show how greedy they were. They should offer some kind of refund for their deceit.
High levels of student debt have been a central issue for Corinthian, which has been under investigation by more than a dozen state attorneys general and federal investigators over allegations of aggressive and fraudulent marketing, and unfair financial aid practices.
Median federal loan debt for Corinthian’s Everest College programs in Southern California ranged from $9,000 for a dental assistant program to $28,000 for a criminal justice degree, according to school disclosures. The average price at one of Corinthian’s Everest campuses in Southern California is $20,000 to $25,000 per year, according to federal data.
It’s partly a California saga, the story of a well connected cabal ripping off the taxpayer. The New Republic described how Corinthian, with a bevy of Democratic party heavy hitters on its board, was investigated by California AG Kamala Harris for going too far after having been given a second chance at the last minute by Jerry Brown, until it finally shut itself down.
On June 6, 2007, the California attorney general’s office was on the verge of suing Corinthian Colleges for intentionally and blatantly lying to prospective students about the company’s record of placing graduates into jobs. The AG’s complaint against the giant, publicly traded for-profit higher education company had been written, and a request prepared for a preliminary injunction to bar Corinthian from continuing to make false claims about its job placement rates. The press office was busy contacting reporters to let them know that there would be a news conference the next day announcing the suit.
The press conference was never held. At the eleventh hour, Attorney General Jerry Brown surprised the lawyers in his office by telling them he was stopping the lawsuit. A month and a half later, Brown (who is now California’s governor) announced that his office had reached a $6.5 million settlement with Corinthian, which has annual revenues of about $1.6 billion. The agreement required the school chain to provide $5.8 million in restitution to students who had been misled. It also forced the company to shut down nine of its campuses’ worst-performing programs. And it permanently enjoined Corinthian from continuing to deceive students about its job placement rates.
Yet in another way the Corinthian story is universal, of a piece with the Baltimore riots and the now fading Atlanta Public School cheating scandal. The question these events jointly pose is whether the Blue Model has any life left in it. For years lower-income people, especially African Americans, have been sustained by the dream of a middle-class prosperity that lay at the end of government funded-conveyor belts. Corinthian was the epitome of a people-mover into the good life, a process that Hillary Clinton calls middle-class economics. The deal was is that if one voted for those who promised to “spread the wealth” they in return would open doors closed for centuries by racism, patriarchy or gender specificity so that the masses could enter the broad uplands of the Dream.