U.S. Department of Education Heightens Oversight of Corinthian Colleges

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U.S. Department of Education Heightens Oversight of Corinthian Colleges

June 19, 2014

The U.S. Department of Education’s Federal Student Aid (FSA) office has placed Corinthian Colleges Inc. on an increased level of financial oversight after the company failed to address concerns about its practices, including falsifying job placement data used in marketing claims to prospective students and allegations of altered grades and attendance.

“The Department’s foremost interest is to protect students and make sure they are educated by institutions that operate in accordance with our standards,” said U.S. Education Under Secretary Ted Mitchell. “We made the decision to increase oversight of Corinthian Colleges after careful consideration and as part of our obligations to protect hardworking taxpayers and students’ futures.”

Corinthian is the parent company of the Everest Institute, Everest College, WyoTech and Heald brands, which enroll 72,000 students nationwide who receive $1.4 billion in federal financial aid money annually. All of Corinthian’s campuses are now required to wait 21 days after submitting student enrollment data to draw down money for federal student aid. The Department remains in close contact with Corinthian executives to protect the interests of the students enrolled at its various campuses.

FSA places higher education institutions on heightened financial oversight for a variety of reasons. The Department has requested data from Corinthian multiple times in the last five months to address inconsistencies in the company’s job placement claims for graduates, but Corinthian officials have not turned over the documents. Since January, the Department has sent Corinthian five letters requesting data and other documentation required by law. The Department notified Corinthian of heightened monitoring on June 12, which the company acknowledged today in a filing with the Securities and Exchange Commission.