For more than a decade, Corinthian Colleges, Inc. has been the target of lawsuits and state and federal investigations for its deceptive marketing, falsification of employment placement rates and other fraudulent behavior. Long before last summer, it had become obvious that CCi was ripping off students and lying about it.
But Sen. Marco Rubio of Florida had sought leniency for the 100-campus for-profit operation. Sahlil Kapur at Bloomberg reports that Rubio sent a letter dated June 20, 2014, to Jim Shelton, the deputy secretary of education, and Ted Mitchell, the undersecretary for post-secondary education:
"It has been brought to my attention that the U.S. Department of Education has recently placed extreme financial constraints on Corinthian Colleges, Inc. by restricting the company's timely access to federal financial aid. It is my understanding the Department of Education has requested extensive documents be provided by Corinthian Colleges for review, and Corinthian has acted in good faith to try to provide these documents as expeditiously as possible," Rubio wrote.
"While I commend the Department's desire to protect our nation's students from fraudulent and malicious activity by any institution of higher education, regardless of tax status, I believe the Department can and should demonstrate leniency as long as Corinthian Colleges, Inc. continues to expeditiously and earnestly cooperate by providing the documents requested."
CCi was always quick to provide documents in the various investigations it had faced. But there was no speed applied when it came to altering its crooked policies. Which is why the Department of Education had forced it to sell most of its campuses and, two weeks ago,
fined it $30 million for fraud, including overstating job placement results to prospective students. "Instead of providing clear and accurate information to help students choose which college to attend, Corinthian violated students' and taxpayers' trust," said DOE Under Secretary Ted Mitchell in a statement. After a string of actions, the fine was the one that forced CCi to shutter its remaining 28 campuses, leaving 16,000 students in the lurch.
More on this can be read below the fold.
In February this year, the Consumer Financial Protection Bureau and the Department of Education forgave $480 million in student loan debt for CCi students:
“Today’s action will provide substantial relief to current and past students who were harmed by Corinthian’s predatory lending scheme,” said CFPB Director Richard Cordray. “These consumers were lured into high-cost loans destined to default, and then targeted with aggressive debt collection tactics. We will be vigilant to ensure that consumers receive this important relief and that others are protected in the for-profit college industry.”
In addition to that half billion dollars of taxpayer money, there is an estimated $200 million in student debt incurred by the 16,000 CCi students who were enrolled at the 28 shuttered campuses. There's a good chance much of that debt will also be forgiven if students can't find legitimate institutions that will accept transfers of CCi educational credits.
Rubio's letter in behalf of leniency for an operation that contributed $5,000 to his PAC in 2014 is especially galling because he has modeled himself as a champion of students. He seems to be a bigger champion of giving shady for-profit educational institutions access to federal financial aid for students. In the final year of its nearly 20-year existence, CCi had access to $1.2 billion in such aid. As a two-year investigation led by now-retired Sen. Tom Harkin discovered, CCi isn't the only one of those shady operations. In fact, the investigators found, CCi's behavior is the norm.