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Groups Oppose Corinthian Sale to ECMC

A coalition of 46 student, consumer, veterans and civil rights groups on Wednesday wrote to the Obama Administration and U.S. Department of Education to oppose the proposed sale of 56 Corinthian Colleges' campuses to ECMC, a nonprofit student loan guarantee agency.

"The terms of the proposed sale to ECMC would not give students the choice of completing or a fresh start, while leaving the campuses in the hands of a troubled entity with no educational experience," the groups wrote. They called on the department to exercise more flexibility in allowing Corinthian students to seek loan discharges. The letter also suggests stricter terms for an ECMC deal, such as requiring that the campuses meet "gainful employment" regulations for seven years.

The sale, which department officials back, is expected to close in January.

 

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Oregon Loses Appeal of Apollo Lawsuit

A U.S. appeals court on Tuesday sided with a lower court's decision to dismiss a class-action lawsuit the State of Oregon had filed against the Apollo Education Group. The suit alleged that Apollo, which owns the University of Phoenix, had made misleading statements about its enrollment and revenue growth. As a result the state's pension fund lost $10 million, according to the lawsuit. But the courts -- including the U.S. Court of Appeals for the Ninth Circuit, which ruled Tuesday -- have rejected those claims, finding that Apollo's statements were lawful "business puffing." 

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For-Profit Settles With Massachusetts for $3.75 Million

The Salter Schools, a for-profit chain in Massachusetts, has settled with the state's attorney general, Martha Coakley, over allegations of misrepresented job-placement rates and deceptive student recruitment, according to a news release from Coakley's office. Salter agreed to pay $3.75 million, the bulk of which will be used to help roughly 600 of the schools' former students pay down loans. The company told The Boston Globe that it disputes the allegations, but did not elaborate to the newspaper.

Coakley is conducting a broad investigation of the for-profit industry. She has filed several lawsuits as part of the probe, including one against Corinthian Colleges. The Salter settlement is the second and largest of the settlements her office has secured so far.

 

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Clearinghouse Says Enrollment Is Down Again

College enrollment has declined by more than 1 percent for three consecutive years, according to newly released data from the National Student Clearinghouse Research Center. The drop of 1.3 percent is slower than that of the previous two years, according to the report, but still reflects a loss of almost 265,000 students. Most of the decline is among adult students, many of whom have joined the workforce as the economy rebounds.

Senators Want Loan Discharges for Corinthian Students

A group of 13 Senate Democrats want the U.S. Department of Education to discharge federal student loans for some current and former students of Corinthian Colleges. In a letter to Arne Duncan, the Senators urged immediate discharges for any borrowers who are covered by lawsuits filed by federal and state agencies against the troubled for-profit chain, which is being dismantled.

The group, which includes Sen. Elizabeth Warren, a Massachusetts Democrat, said the department has the legal authority to forgive loans when students have legal claims against their colleges. They said lawsuits in California and Massachusetts directly relate to lending to Corinthian students, as well as to the education they received.

Kent Jenkins, a spokesman for Corinthian, said it would be unjust for the federal government to act on unproven allegations that are being contested in court. "Their letter argues that court is an unnecessary formality," he said in a written statement, "and its disregard for basic fairness and due process is deeply troubling."

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New roles for guarantee agencies in era of direct federal lending

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Guarantee agencies branch out as private-lending pool dries up. Most stick to college completion and financial advising, but one produces a film while another buys 56 campuses from a for-profit.

 

College Used Strippers as Student Recruiters, Feds Say

The legal pursuit of a defunct for-profit college in Florida and its former owner gets wilder with each filing. A new civil suit filed by a U.S. attorney and the state's attorney general, Pam Bondi, alleges that FastTrain College defrauded the federal government with false claims for millions of dollars in financial aid.

The seven-campus for-profit, which offered credentials in IT and medical professions, closed in 2012. In October the Federal Bureau of Investigation arrested Alejandro Amor, the college's former owner, and three of its admissions representatives. They were charged with the theft of government funds. FastTrain allegedly submitted fraudulent aid claims for 1,300 students, netting $6.5 million.

According to the civil suit, however, the college received more than $35 million in Pell Grants and other federal aid. And, as The Miami Herald reported, the lawsuit said one campus "hired attractive women and sometimes exotic dancers and encouraged them to dress provocatively while they recruited young men in neighborhoods to attend FastTrain."

Amor, who owned a $2 million home, 54-foot yacht and private plane, faces multiple charges that could include jail time. 

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New President of Charleston School of Law Quits After 8 Days

Maryann Jones, incoming president of the Charleston School of Law, resigned after just eight days on the job, according to The Post and Courier, a Charleston newspaper. The law school's possible sale to a for-profit chain, the InfiLaw System, has been a source of controversy. Jones said in a written statement that she decided not to sign her job contract because of "the level of vitriol, with all sides making me a lightning rod for an unfortunate situation that was not of my making."

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Rep. Kline Will Again Lead House Education Committee

U.S. Representative John Kline of Minnesota, the Republican who leads the House education committee, will keep that post in the next Congress.

As was expected, Kline's Republican colleagues voted Wednesday to officially name him as the committee's chair for the next two years.

Kline said in a statement that "strengthening higher education" was among the "national priorities that will remain at the forefront of the committee's agenda."

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Thurgood Marshall Fund Partners With U. of Phoenix

The Thurgood Marshall College Fund and the University of Phoenix this week announced an alliance through which students at historically black colleges and universities (HBCUs) will be able to take online courses from the for-profit chain to supplement their on-campus studies. Phoenix and the scholarship fund will subsidize the online courses so participating students at HBCUs will not have to pay more than their usual, semester-based tuition and fees. "This opportunity will give HBCUs access to online learning not previously available,” said Johnny C. Taylor Jr., the fund's president and CEO, in a written statement.

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