A California judge on Wednesday ordered the defunct Corinthian Colleges to pay $1.17 billion because of what he found to be false advertising and other practices that misled students into enrolling and borrowing money to pay tuition, The Los Angeles Times reported. The ruling came in a suit filed by Kamala D. Harris, the California attorney general. The ruling said Corinthian misled students through false statistics about job placement rates and the unlawful use of U.S. military seals in advertisements, among other practices. The ruling calls for Corinthian to pay $820 million to former students and $350 million in civil penalties. It is unclear how much money Corinthian still has.
The California attorney general last week released thousands of pages of documents in the state's lawsuit against Corinthian Colleges, which collapsed last year. ProPublica analyzed the documents and has now published numerous email messages and documents showing how recruiters for Corinthian enrolled homeless people and helped them borrow money. The students then dropped out quickly and were left with considerable debt. Other documents show that Corinthian recruiters targeted those with low self-esteem.
Baltimore-based Laureate Education announced earlier this week they had reached an agreement with Eurazeo, a European investment company, to sell Glion Institute of Higher Education and Les Roches International School of Hotel Management for $384 million.
Glion is a hospitality business institution with campuses in Switzerland and London that enroll about 2,000 students. Les Roches has campuses in Chicago, Jordan, Shanghai, Switzerland and Spain, which enroll about 2,900 students.
The sale of both institutions is subject to regulatory and accreditor approval.
Linda Katehi, chancellor of the University of California at Davis, lasted only days on the board of the DeVry Education Group. She quit amid criticism for joining the DeVry board while the for-profit education provider was under investigation. Katehi was named to the DeVry board at the same time as another university president, Ann Weaver Hart of the University of Arizona. Initially, there was no controversy over the issue in Arizona.
But now members of the Faculty Senate and others are asking questions and 17 people have submitted complaints about Hart taking the position to the Arizona Board of Regents, The Arizona Daily Star reported. Hart is defending her decision to take the board seat, through which she will earn $70,000 plus $100,000 in stock.
Hart said she plans to work on the board "toward assuring that higher education is available to a segment of Americans who will never be able to attend universities like the University of Arizona."
Historian A. J. Angulo examines the history of for-profit colleges and universities and how many of the problems surrounding these institutions aren't new, but rooted in a past that goes back to the colonial era.
In a victory for the Obama administration, a federal appeals court on Tuesday rejected a challenge by for-profit colleges of the U.S. Department of Education’s gainful employment rule.
The court upheld the administration’s rewritten regulations that are aimed at holding for-profit colleges more accountable for the earnings and loan debt of their graduates.
A three-judge appeals panel sided with a lower court’s ruling that rejected claims by the Association of Private Sector Colleges and Universities that the rule’s debt-to-earnings metrics were arbitrary and lacked congressional authority.
The appeals court again affirmed that the Education Department had the authority to craft the regulations defining gainful employment with a measure of students’ postgraduate earnings and debt. The court wrote that “it would be strange for Congress to loan out money to train students for jobs that were insufficiently remunerative to permit the students to repay their loans.”
A previous lawsuit by the for-profit college association in 2012 led a federal court to strike down key parts of the Obama administration’s original regulations. That sent the administration back to the drawing board to craft new regulations, which went into effect last July.
“When the first gainful employment regulation was struck down by the courts, we expressed hope that the era of overregulation and litigation would give way to a public-private partnership focused on giving Americans the occupational skills they need to succeed in the workforce," Steve Gunderson, APSCU's president and CEO said in a written statement. "We again call on the department to engage with us in finding ways to enhance both quality and opportunity for all students -- especially those seeking employment skills."
Linda Katehi, chancellor of the University of California at Davis, resigned Monday from the corporate board of the DeVry Education Group, which operates DeVry University. The company just last week announced that she and Ann Weaver Hart, president of the University of Arizona, had joined the board.
Katehi made the decision to quit after facing sharp criticism from consumer groups and a powerful California lawmaker, The Sacramento Beereported. Some of the pushback revolved around news last month that the U.S. Federal Trade Commission is suing DeVry over allegations that the company made false claims about its job placement rates and its graduates' earnings. A spokesman for UC Davis said DeVry approached Katehi before the FTC lawsuit went public.
“I initially chose to accept the appointment because I believed I could contribute to improving the educational experiences of the students attending DeVry institutions, but in light of a variety of other issues that have come to the fore, I have determined that I am unable to serve,” Katehi said in her resignation letter, according to the Bee.
Former students of Mattia College held a protest Monday after the institution announced this weekend that it had shut down, The Miami Heraldreported. Students said there is no one to help them, as they need to continue their education but are finding themselves unsure of their ability to transfer any credit.
The Herald recently reported on a boom in for-profit higher education, prompted by 15 state laws to encourage more for-profit colleges to open. But this boom is now being followed by closures, in part because of tougher federal enforcement of laws about colleges deemed to be a financial risk.
Public Citizen, a consumer advocacy group, filed a petition today with the U.S. Department of Education to demand that for-profit institutions that require students to sign predispute arbitration clauses not be allowed to receive federal funding.
"Taxpayers should not have to subsidize predatory schools that deny their students a day in court," said Julie Murray, an attorney with Public Citizen and author of the petition, in a news release. "The Department of Education should work quickly to protect students and their families from predatory schools trying to immunize themselves from accountability for their wrongdoing."
The petition also urges the department to bar institutions from including arbitration clauses in enrollment or other agreements with students as a condition of receiving federal aid.
Critics of for-profits have argued for years that students who are forced to sign arbitration agreements as part of enrollment are left without much legal recourse when they're defrauded by the institutions.