Everest College has four campuses in North Texas and used to fall under the company name Corinthian Colleges Inc., a billion dollar entity. However, an investigation by News 8 in 2010 revealed information that would change things for the college’s financial future.
In 2010 News 8 conducted an investigation into Everest College/Corinthian Colleges and discovered some serious inconsistencies. One of the things it found was that of the 288 jobs the school claimed graduates obtained upon graduation, one was at a non-existent company and another was in a company they misrepresented.
The federal government had been trying for years to obtain information from Everest, so in June of this year it threatened to cease providing federal funds to the school. Considering the fact that about 85% of Everest’s cash flow comes from federally-backed student loans and grants, this would essentially put the school out of business. Corinthian reached an agreement with the federal government whereby it will receive a final $16 million in funds that were previously restricted, but this will only allow current students to complete their programs. They will not be allowing any new students to enroll, and will be shuttering most if not all of their campuses.
About ten years ago, Corinthian Colleges was a company that had the ability to easily obtain money from the federal government and from students who were desperate for what they had to offer. While the average person may be unfamiliar with Corinthian, it takes in $1.4 billion a year from in student grants and loans. Its schools use the names Heald, Everest, and WyoTech.
Prior to the action the government took, Corinthian had also violated agreements on loans it had obtained from Bank of America, which caused them to reduce the amount it would allow Corinthian to borrow. Bank of America also demanded a shorter repayment period for those loans. Even thought financial statements appeared to indicate the company’s net worth was substantial, its chief asset was from the tax savings on future profits as a result of past losses. Other assets were from defaulted student loans.
According to the agreement with the federal government, Corinthian is supposed to choose those campuses it plans to sell to someone else and those it will simply close. Those it chooses for closure will continue operate only for students currently enrolled but will not admit any new students. If this plan is carried out, Corinthian will vanish, but it’s possible many of the campuses will continue to operate under different owners.
To prevent situations such of those that exist at Everest, the Education Department has been trying to develop a rule surrounding “gainful employment.” What this means is it would decline to provide student loans for career-education programs similar to those Corinthian offers if too few graduates are able to find jobs in their chosen fields. While the first attempt was denied by a federal judge, they made changes which are projected to result in a project rule in October.
If you are a current student or recent graduate of Everest College, you’re likely concerned about what this means for you. If you feel that you were misled, lied to, or otherwise wronged by Everest College or Corinthian Colleges, contact our office to discuss your options. While we may not be able to help with every case, we’re happy to evaluate the facts of your case for no charge.