How a for-profit college created fake jobs to get taxpayer money

Tuesday, December 17, 2013

Everest College's $2,000-per-head "subsidy" program in Decatur, Ga., stands among an array of tactics used for years by the institution's parent company, Corinthian Colleges Inc., to systematically pad its job placement rates, according to a review of contract documents and lawsuits and interviews with former employees.

More than a marketing tool to lure new students, solid job placement rates allow the company to satisfy the accrediting bodies that oversee its nearly 100 U.S. campuses, while enabling Corinthian to tap federal student aid coffers -- a source of funding that has reached nearly $10 billion over the last decade, comprising more than 80 percent of the company's total revenue.

The practice of paying employers to hire Everest graduates ended in Decatur in late 2011, a year before Corinthian shuttered the campus. But it wasn't the only Corinthian school to try this approach, according to a lawsuit filed in San Francisco in October by the California attorney general. That complaint accuses Corinthian of employing a broad range of fraudulent marketing techniques, including overstating its job placement rates. It specifically accuses two Corinthian campuses in California of paying a temp agency to hire graduates.

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