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On July 3, 2014 the US Department of Education (DoE) and CCi reached an agreement for CCi to execute a controlled shut-down of 12 of its USA schools and a sale of 85 other schools with transition funding supplied by DoE and monitored by an independent monitor.<ref name="LAT">{{cite web|url=http://www.latimes.com/business/la-fi-corinthian-colleges-agreement-20140704-story.html|title=Corinthian Colleges will sell 85 schools, close 12 others - LA Times|author=Los Angeles Times|date=4 July 2014|work=latimes.com|accessdate=14 November 2014}}</ref><ref name="SJM">{{cite web|url=http://www.mercurynews.com/education/ci_26089128/corinthian-colleges-sell-85-u-s-campuses-and?nstrack=sid:16005748-met:0000108-cat:1009031-order:4|title=Corinthian Colleges to sell 85 U.S. campuses and close 12 under new agreement|publisher=Mercurynews.com|accessdate=14 November 2014}}</ref> The announcement leaves the eventual status of the Canadian schools undetermined.<ref name="LAT" /><ref name="SJM" /> On July 3, 2014 the US Department of Education (DoE) and CCi reached an agreement for CCi to execute a controlled shut-down of 12 of its USA schools and a sale of 85 other schools with transition funding supplied by DoE and monitored by an independent monitor.<ref name="LAT">{{cite web|url=http://www.latimes.com/business/la-fi-corinthian-colleges-agreement-20140704-story.html|title=Corinthian Colleges will sell 85 schools, close 12 others - LA Times|author=Los Angeles Times|date=4 July 2014|work=latimes.com|accessdate=14 November 2014}}</ref><ref name="SJM">{{cite web|url=http://www.mercurynews.com/education/ci_26089128/corinthian-colleges-sell-85-u-s-campuses-and?nstrack=sid:16005748-met:0000108-cat:1009031-order:4|title=Corinthian Colleges to sell 85 U.S. campuses and close 12 under new agreement|publisher=Mercurynews.com|accessdate=14 November 2014}}</ref> The announcement leaves the eventual status of the Canadian schools undetermined.<ref name="LAT" /><ref name="SJM" />


In February 2015, ECMC, a non-profit education firm, took ownership of more than half of Corinthian Colleges' campuses. ECMC also agreed to forgive student debt on Corinthian College's Genesis loans after a series of years.<ref>http://www.washingtonpost.com/news/business/wp/2015/02/03/heres-how-a-debt-collector-plans-to-turn-around-failing-for-profit-colleges/</ref><ref>http://www.wsj.com/articles/corinthian-colleges-buyer-agrees-to-forgive-480-million-in-student-loans-1422991748</ref> In February 2015, ECMC, a non-profit education firm, took ownership of more than half of Corinthian Colleges' campuses. ECMC also agreed to forgive student debt on Corinthian College's Genesis loans after a series of years.<ref>http://www.washingtonpost.com/news/business/wp/2015/02/03/heres-how-a-debt-collector-plans-to-turn-around-failing-for-profit-colleges/</ref><ref name=gleason>{{cite news|last1=Gleason|first1=Stephanie|last2=Zibel|first2=Alan|title=Corinthian Colleges Buyer Agrees to Forgive $480 Million in Student Loans|url=http://www.wsj.com/articles/corinthian-colleges-buyer-agrees-to-forgive-480-million-in-student-loans-1422991748|accessdate=February 3, 2015|work=]|date=February 3, 2015}}</ref>


==History of Rapid Growth and Decline== ==History of Rapid Growth and Decline==

Revision as of 20:32, 3 February 2015

Corinthian Colleges, Inc.
Traded asNasdaq: COCO
IndustryEducation
Founded1995 (1995)
Websitecci.edu

Corinthian Colleges, Inc. (CCi) was one of the largest for-profit post-secondary education companies in North America until 2014.

CCi's schools offered career-oriented diploma and degree programs in health care, business, criminal justice, transportation technology and maintenance, construction trades, and information technology. CCi had over 100 Everest, Heald and WyoTech campuses throughout the United States and Canada, and also offered degrees exclusively online.

As of 2015, Corinthian Colleges faces numerous investigations and lawsuits, including a federal criminal investigation.

The California Attorney General, Kamala Harris, stated that Corinthian Colleges targeted single parents who were close to the poverty level, a demographic that its internal documents described as "composed of '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 future,' through aggressive and persistent internet and telemarketing campaigns and through television ads on daytime shows like Jerry Springer and Maury Povich.'"

On July 3, 2014 the US Department of Education (DoE) and CCi reached an agreement for CCi to execute a controlled shut-down of 12 of its USA schools and a sale of 85 other schools with transition funding supplied by DoE and monitored by an independent monitor. The announcement leaves the eventual status of the Canadian schools undetermined.

In February 2015, ECMC, a non-profit education firm, took ownership of more than half of Corinthian Colleges' campuses. ECMC also agreed to forgive student debt on Corinthian College's Genesis loans after a series of years.

History of Rapid Growth and Decline

Corinthian Colleges was founded in February 1995. The five founders — David Moore, Paul St. Pierre, Frank McCord, Dennis Devereux, and Lloyd Holland — were executives at National Education Centers, Inc. (NECI), a for-profit operator of vocational schools based in Irvine, California. The founders planned to acquire schools that were fundamentally sound, but which for one reason or another were performing below their potential.

Historically, CCi grew rapidly through acquisitions and through organic growth, including opening new branch campuses, remodeling, expanding or relocating existing campuses, and adopting curricula into existing colleges.

Acquired Schools:

  • American Motorcycle Institute
  • Ashmead College
  • Blair College
  • Bryman College
  • Bryman Institute
  • Duff's Business Institute
  • Florida Metropolitan University
  • Georgia Medical Institute
  • Kee Business College
  • Las Vegas College
  • National Institute of Technology
  • National School of Technology
  • Olympia Career Training Institute
  • Olympia College
  • Parks College
  • Rochester Business Institute
  • Tampa College
  • Western Business College

Schools and programs

Everest

CCi operated Everest campuses in the United States and Canada, although all US campuses were to be sold or closed beginning on July 3, 2014, leaving only the Canadian campuses under CCi's control.

Everest Institute offers diploma programs in health care, business, computer technology, electronics, and HVAC (heating, ventilation and air conditioning).

Everest College offers diploma and associate's degree programs in the health care, business, and computer technology fields.

Everest University offers associate's, bachelor's, and master's degree programs. It offers programs in a variety of fields, including business, accounting, criminal justice, paralegal studies, and health care. Everest University campuses also offer diploma programs in health care. There are ten Everest University campuses across Florida, which were formerly known as Florida Metropolitan University.

Everest University Online

Everest University Online (EUO), a division of Everest University, offers online degree programs in accounting, applied management, business, computer information science, criminal investigations, criminal justice, criminal investigations, homeland security, and paralegal studies. EUO is headquartered in Tampa, Florida.

Everest College Phoenix

Everest College Phoenix offers bachelor's degree, associate's degree, and diploma programs. It offers programs in accounting, business, medical assisting, medical insurance billing and coding, nursing, criminal investigation, criminal justice, and paralegal studies. Everest College Phoenix has campuses in Phoenix and Mesa, Arizona, as well as an online learning center.

Everest College Phoenix is regionally accredited by the Higher Learning Commission, a member of the North Central Association of Colleges and School.

Heald College

Heald College is one of the nation's oldest business career colleges in the Western United States, with roots extending back to 1863. Heald offers associate's degree, diploma, and certificate programs. It offers programs in various fields, including health care, accounting, business, computer technology, criminal justice, and paralegal studies.

Heald College is regionally accredited by the Western Association of Schools and Colleges Senior College and University Commission. Heald College has campuses in California, Oregon, and Hawaii, as well as an online learning center.

In November 2009, it was announced that CCi was purchasing Heald's parent company for $395 million. In January 2010, CCi announced that it had completed the acquisition. CCi retained the Heald name, and it was reported that it also retained its faculty and staff.

WyoTech

WyoTech offers career-oriented training for mechanical and technical occupations in the automotive, diesel, motorcycle, watercraft, HVAC (heating, ventilation and air conditioning), electrician, and plumbing fields. WyoTech has campuses in Pennsylvania, Florida, California, and Wyoming.

Accreditation

Accreditation is a voluntary, non-governmental process by which institutions submit themselves to qualitative review by an organization of peer institutions.

There are two basic types of accreditation: (1) institutional; and (2) specialized or programmatic. Institutional accreditation normally applies to an entire institution while specialized or programmatic accreditation normally applies to programs, departments, or schools that are part of an institution. Institutional accreditation is performed by both regional accrediting agencies and national accrediting agencies.

Accrediting agencies primarily examine the quality of the education offered at the institution. A grant of accreditation is generally viewed as certification that an institution and its programs meet generally accepted levels of quality.

Everest College Phoenix campuses are regionally institutionally accredited by The Higher Learning Commission, a member of the North Central Association of Colleges and Schools (HLC). Heald College campuses are regionally institutionally accredited by the Senior College and University Commission – Western Association of Schools and Colleges (WASC Senior). Everest Institute, Everest College, Everest University, and Wyotech campuses are nationally institutionally accredited by one of two national accrediting agencies: Accrediting Commission of Career Schools and Colleges (ACCSC); or Accrediting Council for Independent Colleges and Schools (ACICS).

AHLC, WASC Senior, ACCSC, and ACICS are recognized by the Secretary of the United States Department of Education as reliable authorities concerning the quality of education and training offered by the CCi institutions that they accredit.

Faculty and students

As of December 31, 2013, CCi's total student population was 77,584. As with the entire education sector, CCi has faced a decrease in enrollment and a corresponding depressed stock price. CCi's top mutual fund holder is Wells Fargo Advantage Small Cap Value Fund.

As of June 30, 2013, CCi had approximately 15,200 employees in North America, including 6,000 full-time and part-time faculty members.

For five consecutive years, CCi has been named a Top Workplace in Orange County, California where its headquarters are located.

Financial aid

The Higher Education Act provides that a private, for-profit institution, such as CCi's institutions, may derive no more than 90% of its revenue from the Title IV federal student aid programs. In 2010, CCi reported that it received 81.9% of revenue from Title IV federal student aid programs. Corinthian Colleges (CCI) acquired QuickStart Intelligence in summer 2012, an Irvine, California-based, privately held technology training company. As a B2B revenue stream; CCI acquired QuickStart Intelligence to leverage the 10%, non-government funding essential to back the additional student loans for CCi’s core adult learning programs. As Misplaced Pages notes, referenced in CCi’s 10-K report; only 90% of revenue from CCi can be obtained from student loan’s. Both CCi and Quickstart call this practice “10 revenue” as a means satisfy the 10% private-sourced (B2B) / non government student loan revenue enabling CCI to obtain additional student loans.

Student Loan Default Rate

A significant requirement imposed by Congress is a limitation on participation in Title IV programs by institutions whose former students default on the repayment of federal student loans in excess of specified rates ("Cohort Default Rates"). On March 25, 2013, CCi received a draft three-year Cohort Default Rates from the U.S. Department of Education for students who entered repayment during the federal fiscal year ending September 30, 2010 (the "2010 Cohort"), measured over three federal fiscal years of borrower repayment. The weighted average of CCi's institutions was 19.0%, a 9.0 percentage point decrease from the 28.0% weighted average for the three-year cohort default rate for students who entered repayment during the prior fiscal year. For the 2010 Cohort, none of CCi's institutions exceeded the default threshold set by the U.S. Department of Education.

Legal proceedings

In 2004, a former student from Florida Metropolitan University initiated an action against CCi, claiming he was misled with respect to the school's accreditation and his ability to transfer credits. The lawsuit proceeded in arbitration pursuant to the agreement between the parties. After hearing all of the evidence, the arbitrator found in favor of CCi on all counts and dismissed the lawsuit.

In April 2005, fourteen students from Bryman College's Tacoma, Washington campus filed an action against CCi in the Superior Court of the State of Washington. The students claimed they did not receive proper training for their careers in medical assisting, that they were misled about the program's accreditation status, their eligibility to take a national certification exam, the transferability of their credits, and the availability of internships. The case was removed to the United States District Court for the Western District of Washington and was ultimately dismissed.

In 2008, a purported class action suit was filed against CCi and a wholly owned subsidiary in Santa Clara Superior Court on behalf of graduates of Bryman College's medical assistant vocational programs. The lawsuit alleged that Bryman made untrue or misleading statements to students related to employment success, in order to induce them to enroll and stay enrolled in their medical training programs. This case was ultimately dismissed.

State of California lawsuits

In July 2007, the California Attorney General announced that, without any findings or admissions of wrongdoing, CCi agreed to pay $6.5 million to settle allegations that the school engaged in false advertising. The amount included $5.8 million in restitution to students as well as $500,000 in civil damages and $200,000 in investigation costs. CCi issued a statement saying: "We disagree with the Attorney General's conclusions, but we are pleased to have this matter behind us. The agreement is not evidence of wrongdoing, and the company specifically denied any wrongdoing as part of the settlement. We are fully committed to providing quality education and job placement services for students and to being in compliance with state law and regulation."

In October 2013, the State of California again sued CCi alleging "false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements." According to the California Attorney General's complaint, CCi's "predatory marketing efforts specifically target vulnerable, low-income job seekers and single parents who have annual incomes near the federal poverty line. In internal company documents obtained by the Department of Justice, CCI describes its target demographic 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 future.'"

In November 2013, CCi issued a statement asserting that the California Attorney General's complaint is "a document built on a foundation of misquoted, deceptively excerpted and—at best—misunderstood materials." It went on to say that the California Attorney General is "wrongly accusing our schools of inflating job placement statistics for our graduates." CCi indicated that it plans to "vigorously defend the integrity of the work we do for our students and graduates."

Federal investigation in the United States

On October 17, 2007, U.S. Department of Education investigators seized records at Florida campuses of for-profit colleges, including CCi's former National School of Technology in Fort Lauderdale, Florida, and Florida Career College in Lauderdale Lakes, Florida and Pembroke Pines, Florida. The school reported that it was not informed why the records were seized or why similar actions had been taken against other institutions in the area. The campus re-opened the next day.

In June 2013, CCi disclosed that it is under investigation by the Securities and Exchange Commission (SEC). CCi is cooperating with the SEC in its investigation. The SEC has not filed any actions against CCi in connection with this investigation.

In November 2013, the US Consumer Financial Protection Bureau reported that they were investigating CCi. ] In December 2013, CCi received a "Notice and Opportunity to Respond and Advise" letter from the CFPB. CCi responded by stating that it "believes that its acts and practices relating to student loans are lawful and that its lending program is essential to many students." The company also explained that the loans offered under the program are "modest in size and have reasonable interest rates," and that the loans allow many students to attend college who otherwise would not have the opportunity to do so. The average loan amount per borrower is $4,700 and the average annual interest rate is 8.5 percent and the maximum rate is 9.9 percent. Loans are only offered to students who have a gap between their educational costs and the available financial aid from all other government and personal sources. The CFPB filed a lawsuit against Corinthian in September 2014 over its loan program and debt collection practices.

Other investigations

In August 2007, the State of Florida closed an investigation into Florida Metropolitan University with no fines, penalties or findings of wrongdoing. The Florida Office of the Attorney General and Florida Metropolitan University entered into an Assurance of Voluntary Compliance acknowledging that Florida Metropolitan University participates in the Florida Statewide Course Numbering System to facilitate the transfer of eligible credits to other institutions.

Florida Metropolitan University agreed to continue its efforts to help students with transfer credits and to provide students with clear disclosures.

CCi is awaiting the outcome of regulatory investigations by the SEC and state prosecutors.On January 24, 2014, the Iowa Attorney General's office notified CCi that it is leading an investigation by thirteen states into CCi's business practices. CCi stated that it intends to cooperate. No state attorney general case has been tried and no findings adverse to CCi have been made.

Historic names

References

  1. "History of Corinthian Colleges Inc". Cci.edu. Retrieved 14 November 2014.
  2. "Corinthian Colleges Inc. - North America Campus Locations". Cci.edu. Retrieved 14 November 2014.
  3. Los Angeles Times (13 August 2014). "Corinthian Colleges tells investors it is facing a criminal probe". latimes.com. Retrieved 14 November 2014.
  4. Noel Brinkerhoff (2014-01-01). "Wells Fargo Main Investor in Nation's Worst Private College Company". Allgov.com. Retrieved 2014-05-01.
  5. ^ Los Angeles Times (4 July 2014). "Corinthian Colleges will sell 85 schools, close 12 others - LA Times". latimes.com. Retrieved 14 November 2014.
  6. ^ "Corinthian Colleges to sell 85 U.S. campuses and close 12 under new agreement". Mercurynews.com. Retrieved 14 November 2014.
  7. http://www.washingtonpost.com/news/business/wp/2015/02/03/heres-how-a-debt-collector-plans-to-turn-around-failing-for-profit-colleges/
  8. Gleason, Stephanie; Zibel, Alan (February 3, 2015). "Corinthian Colleges Buyer Agrees to Forgive $480 Million in Student Loans". The Wall Street Journal. Retrieved February 3, 2015.
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  10. "History of Corinthian Colleges, Inc. – FundingUniverse". Fundinguniverse.com. Retrieved 14 November 2014.
  11. "CCi Directory". CCi. Retrieved 2014-05-01.
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  41. "Bad Education". Orlando Weekly. April 4, 2005. Retrieved April 16, 2014.
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  43. "Class Action Suit Filed Against Corinthian Colleges, Inc. on Behalf of Medical Assistant". Reuters. March 12, 2008.
  44. "Leask, Et Al V. Corinthian Colleges, Inc., Et Al". Superior Court of California. Retrieved 2014-05-01.
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  50. ^ "CCi's response to California AG lawsuit" (PDF). Shareholder.com. Retrieved 14 November 2014.
  51. "Corinthian Colleges School Is Latest Florida Campus to Be Scene of Federal Raid". The Chronicle of Higher Education. October 17, 2007.
  52. ^ Brian Haas; Barbara Hijek (2007-10-18). "Another career college raided". Sun Sentinel. Retrieved 2014-05-01.
  53. "Corinthian Colleges Under Investigation by SEC". The Wall Street Journal. Retrieved 14 November 2014.
  54. "For-Profit Colleges Face Consumer Bureau Probe on Lending Roles". Bloomberg. Retrieved 14 November 2014.
  55. ^ "Corinthian Colleges Inc.: CFPB Investigation/Company Student Lending Programs: Background/Key Points" (PDF). Shareholder.com. 2014-02-04. Retrieved 2014-05-01.
  56. "CFPB Sues For-Profit College for FDCPA Violations and Predatory Loan Program". insideARM.com. 2014-09-17. Retrieved 2014-11-21.
  57. ^ Charles Huckabee (2007-11-06). "Florida Attorney General Settles With Corinthian Division". The Chronicle of Higher Education. Retrieved 2014-05-01.
  58. ^ "States Expand For-Profit Education Probe". The Wall Street Journal. Retrieved 14 November 2014.

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