Corinthian’s collapse is a warning to the industry, said Ben Miller, a former senior policy advisor at the U.S. Department of Education and now an analyst at the New America Foundation, a nonpartisan think tank in Washington, D.C.
“The easy revenue model was finding warm bodies that could tap into federal funds,” he said. “Now it’s time to take a step back, weed out the really problematic actors that have popped up, and move toward a new business model.”
Boosting job placement figures was part of a larger pattern of Corinthian’s massaging data on student success, including graduation rates and loan defaults, according to former employees and company records cited in government lawsuits.
Chris Rubacha taught criminal justice classes at Everest’s City of Industry campus from 2009 to 2011. He said he felt pressure from superiors to pass poor-performing students so the school could keep collecting tuition and boost graduation rates.
In one instance, he tried to fail a student who rarely showed up for class or completed assignments. Administrators changed the woman’s grades to pass her, he said.
“It’s all smoke and mirrors,” Rubacha said. “They were just chasing the numbers.”
Corinthian relied on carefully scripted marketing to sell students on the dream of improving their lives through education. A sales force of nearly 2,000 admissions advisors was evaluated daily on the percentage of inquiries converted into enrollments.
Internal presentations instructed admissions workers to overcome “common objections” of students, especially concerns about tuition cost or whether credits would transfer to four-year universities — which don’t, in most cases. Employees were instructed to dodge questions.
“You can easily kill the obstacle without giving away too much information,” read one presentation.
Corinthian said enrolling students must sign a disclosure that makes clear credits are unlikely to transfer.
A similar data-driven culture applied to job placement. Gaines, the former marketing employee, recalled that the company considered students at temp agencies to be “employed,” an allegation also referenced in a pending lawsuit filed last fall by California Atty. Gen. Kamala Harris. The suit also noted problems with “self-employment placements.”
A similar attorney general’s suit in 2007 cited evidence of students placed at “fake businesses” invented in class assignments. Corinthian settled that case for $6.5 million.
Toya Smith, who worked in career services and admissions at an Everest College in Houston, said she was instructed to seek out employers with high turnover rates because of bad management or low pay. That allowed Everest to connect many students with the same company in a short period of time, she said, driving up placement rates — a key metric for federal student aid eligibility.
“It’s not a department set up to help the graduates actually seek out a career,” Smith said. “It was just a way to sell the dream.”
Heidi Vella, 50, has struggled to keep up with the more than $13,000 in federal and private loans she took out for a nine-month surgical assistant program at Everest’s campus in Reseda. Graduating in 2010, she searched for nearly two years before finding a temporary job in her field.
She now hands out food samples at a Santa Clarita Sam’s Club for $11 an hour.
“If I ever thought that my life would be where it is now, I never would have gone to Everest,” she said. “It’s made my life worse.”
(Next page: How did they get away with this?)
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