In a written statement, Corinthian said it had little choice but to raise tuition. The government, the company said in a statement, should allow the company to derive up to 100 percent of its revenue from federal loans and grants. Requiring 10% from other sources “fails to take into account the realities of the demographic we serve,” the company said.
The main third-party lender for Corinthian’s private loan program abandoned the partnership this year. Unable to find a replacement, Corinthian began issuing the loans itself, which ate into cash flow by $4 million to $8 million a month, according to company estimates.
Now that regulators are forcing Corinthian to sell campuses, analysts do not expect buyers to pay much for Corinthian’s brands.
“These are going to be fire-sale prices,” said Trace Urdan, an analyst at Wells Fargo Securities.
Corinthian graduates, meanwhile, are left to question the value of their education.
Eva Garcia, 25, attended Everest’s City of Industry campus in 2008 and 2009 after giving birth to a daughter. She was attracted by assurances of plentiful jobs in medical billing and coding.
Now she finds herself unemployed with nearly $6,000 in debt. The only job Everest helped her get was a temporary placement as a hospital receptionist, she said.
She has since taken Everest off her resume. Most employers viewed it as a mark against her, she said.
“It was messed up, what they did to us, making us believe there was going to be this big opportunity,” she said. “I wish I hadn’t wasted my time, or my money, or my daughter’s first year coming to that place.”
©2014 Los Angeles Time. Visit the Los Angeles Times at www.latimes.com. Distributed by MCT Information Services
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