Huffpost Business
Chris Kirkham Headshot

Sen. Dick Durbin Accuses For-Profit College Chain Of Defrauding Taxpayers

Posted: Updated:
Sen. Dick Durbin (D-Ill.) called for an investigation of the for-profit college company Corinthian Colleges following a HuffPost article that showed how the company boosts job placement rates for gratuates to qualify for federal student loans.
Sen. Dick Durbin (D-Ill.) called for an investigation of the for-profit college company Corinthian Colleges following a HuffPost article that showed how the company boosts job placement rates for gratuates to qualify for federal student loans.

A top Senate Democrat on Thursday called for the Obama administration and collegiate accreditors to investigate whether a major for-profit college company, Corinthian Colleges Inc., systematically deceived students, government officials and taxpayers by inflating its job placement rates.

Citing a HuffPost investigation of Corinthian Colleges published this week, Sen. Dick Durbin of Illinois said the company's practices amounted to "an egregious misuse of taxpayer dollars."

"I write to ask the Department of Education to respond to these allegations and to spell out what, if any, direct authority the Department has to hold Corinthian accountable for this fraudulent behavior," Durbin wrote in a letter to U.S. Education Secretary Arne Duncan.

At for-profit institutions such as Corinthian's schools, job placement numbers are key both for recruiting new students and to satisfying non-profit accreditation agencies that certify the schools' standards. By meeting minimum placement goals for accreditors, Corinthian has been able to tap into federal student aid dollars totaling nearly $10 billion over the last decade -- more than 80 percent of the company's total revenue.

HuffPost drew on documents and interviews with former Corinthian career services employees in six states as part of its investigation into the company's job placement practices. These sources described a corporate culture that focused on hitting employment targets to satisfy accreditors, instead of finding quality jobs for graduates.

According to internal documents and a lawsuit from the California attorney general's office, at least three of Corinthian's Everest College campuses paid employers and a temp agency to hire students into short-term jobs as a way to boost placement numbers.

Other former employees told HuffPost that managers encouraged them to seek out employers with high turnover rates who were known to shuffle through Everest graduates. That arrangement allowed schools to place several students with the same employer over the course of a year. When a student was fired or quit due to poor conditions, according to former employees, Everest could send another graduate to the same workplace, driving up official placement rates.

Durbin sent letters this week to the Department of Education, Corinthian's two national accreditors and Corinthian's chief executive, Jack Massimino.

"You owe an explanation to your students, the public and the United States government," Durbin wrote in the letter to Massimino. "I ask that you provide an accurate accounting of how your graduates are placed in jobs in their field, the average tenure of these jobs, and any financial arrangements Corinthian has with these employers."

In an emailed response to questions, Corinthian spokesman Kent Jenkins said the allegations Durbin is referring to are "inaccurate," adding that "a number of national businesses hire dozens of our graduates every year." Jenkins said Corinthian has more than 750 career services employees, devoting far more resources to finding jobs for graduates than most community colleges.

Jenkins acknowledged that the company paid employers $2,000 to hire graduates at a campus in Decatur, Ga., during a "brief period" in 2011, but he said Corinthian discontinued the program and does not plan to use it again.

"If we find any evidence that company policy in this area has not been observed, we take decisive corrective action," Jenkins wrote.

Durbin spoke about the issue on the Senate floor Thursday, calling for Congress, the Department of Education and accreditors to end what he called a "corporate culture of deception and data manipulation."

"These deceptive practices give the illusion that this is a successful undertaking," Durbin said. "It turns out to be a charade."

Also on HuffPost:

Close
The 10 Most Expensive Colleges
of
Share
Tweet
Advertisement
Share this
close
Current Slide

Suggest a correction

Around the Web

How A For-Profit College Created Fake Jobs To Get Taxpayer Money

Is Corinthian Colleges a Screaming Buy Now?

For-Profit Colleges Face Consumer Bureau Probe on Lending Roles

Corruption Threatens Obama Action on For-Profit Colleges

Corinthian Colleges Inc (COCO): CFPB probes for-profit colleges over student ...

Steve Forbes, the Olympics, Congress and Other Stuff For-Profit Colleges Buy ...