http://www.mass.gov/ago/news-and-updates/press-releases/2014/2014-04-03-corinthian-complaint.html.....For-Profit School Sued for Deceiving Students and Facilitating Unfair Loans
AG Alleges School Used Aggressive Deceptive Marketing Tactics to Increase Enrollments, Secure Federal Student Loan Funds and Hike Profits; Restitution Sought for Affected Students
BOSTON – A for-profit school operating in the Boston area has been sued over allegations that it misrepresented its training programs and job placement rates in order to increase profits, and pushed students into high-interest subprime loans, leaving many students without employment and unable to repay their debt, Attorney General Martha Coakley announced today.
The complaint links to PDF file, filed today in Suffolk Superior Court, alleges that since 2009, Corinthian Colleges, Inc. and Corinthian Schools, Inc., which operate Everest Institute, have misled Massachusetts students in order to increase profits for shareholders at the expense of students and taxpayers.
“We allege that this for-profit school aggressively recruited and misled students by falsely promising high quality, successful training programs, and instead left them with exorbitant student loan debt and without proper training or a well-paying career,” AG Coakley said. “Our office will continue to investigate the for-profit school industry as we continue to see students and taxpayers suffer the consequences of high default rates, inadequate training, and mounting debt.”
The complaint alleges that Corinthian, which subsists largely on taxpayer-backed loans to students, focused intently on recruiting new students regardless of their qualifications or whether the students were likely to complete or benefit from Corinthian’s programs. This includes using deceptive marketing and high pressure enrollment tactics, steering some students to additional private subprime loans, as well as providing poor instruction.
The complaint addresses diploma programs in dental assistant, medical administrative assistant, medical assistant, medical insurance billing and coding, and massage therapy, offered at Corinthian’s Everest Institute locations in Brighton and Chelsea. As of March 2013, Corinthian operated 97 campuses in the United States and 16 in Canada, with a total enrollment of 87,776 students.
The complaint links to PDF file against Corinthian seeks restitution to affected students, civil penalties and fees, along with injunctive relief to prohibit future deceptive practices.
DECEPTIVE MARKETING:
Corinthian allegedly told prospective students that a very high percentage of its Massachusetts students obtain well-paying employment in their fields of study, but the complaint alleges few students in fact obtain jobs in their fields of study.
Corinthian also allegedly told prospective students that its programs had placement rates ranging from 70 to 99 percent, when actual placement rates in certain programs were between 20 and 30 percent. Additionally, Corinthian allegedly hid that it had failed its accreditor’s standards for placement from 2008 to 2011, and allegedly counted temporary jobs lasting longer than one day as a placement, including students who assisted at a two-day health fair. One student even reported that in order to receive her diploma, she was forced to falsely fill out a form stating that she had obtained a job.
According to the complaint, Corinthian deceived students by falsely promising prospective students they were “guaranteed” jobs after graduating. Corinthian, on its Everest website, has long represented “we help our graduates find jobs after graduation.” In fact, the complaint alleges that Everest provides little or no help to students looking for jobs. One student noted “my problem was with the job placement department. Every time I called I would leave a message never to have it returned.”
Corinthian also allegedly misled students about the salaries they could expect after attending the school. One student in the medical assistant program was reportedly told the salaries of graduates start at $17 or $18 per hour, while a second “was told (that the) pay rate was $21-$22.” The actual average wage for entry-level medical assistants in Massachusetts is significantly less (approximately $14 per hour).