For-Profit College Fight Heats Up as Democrats Push to Cut Off New Corinthian Students

A dozen U.S. senators are asking the Education Department to stop the enrollment of new students at Corinthian Colleges Inc., (COCO) owner of Everest and Heald for-profit schools.

The senators, all Democrats, are also asking the Education Department to answer questions related to the protection of students and taxpayer funding, according to a letter sent today to Education Secretary Arne Duncan.

Corinthian, based in Santa Ana, California, said last week it might have to stop operations after the government limited access to federal-aid funding. An agreement with the department would allow the school’s 72,000 students at 107 campuses to continue studies during a transition period. The chain is under investigation by several state attorneys general, the Justice Department and the Consumer Financial Protection Bureau for its marketing and recruiting practices.

“Corinthian has shown itself to be one of the worst actors in the for-profit college industry,” wrote the senators, including Dick Durbin of Illinois and Tom Harkin of Iowa. “It is important that the department continue to hold Corinthian accountable for its actions, but we must not let students be held responsible for the bad actions of this company.”

Detailed Plan

Corinthian is working with the Education Department to develop a detailed plan for its individual campuses by July 1, and will inform students as soon as that plan is complete, Kent Jenkins, a spokesman, said in an e-mail.

“There is clear evidence that students at Corinthian Colleges are well served by their education,” Jenkins said.

The senators also asked that the students not be transferred to other for-profit colleges under investigation and that they be protected from arbitration clauses in their enrollment agreements that bar them from suing Corinthian.

Separately, lawyers for California Attorney General Kamala Harris today asked Judge Curtis E.A. Karnow in San Francisco Superior Court for permission to add allegations to a complaint she filed in October against Corinthian, which claimed the company lured students with false and predatory advertising.

Harris said in a statement that her office is seeking a court order requiring Corinthian to end its misleading advertising and to inform prospective students about its “dire finances.”

Karnow set a July 11 hearing date for arguments on the requested order, Nicholas Pacilio, a spokesman for the attorney general, said in an e-mail.

Jenkins had no immediate comment on California’s request.

To contact the reporter on this story: Janet Lorin in New York at jlorin@bloomberg.net

To contact the editors responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net; Chris Staiti at cstaiti@bloomberg.net Andrew Dunn, Fred Strasser

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