How for-profit colleges stay in business despite terrible track record

Kylie Lacey's picture

By every available indication, Corinthian Colleges Inc., one of the country's largest chains of for-profit colleges, stands out as an institution whose students face especially long odds of success.

At nearly half of Corinthian's schools, more than 30 percent of students default on their federal loans within three years of leaving campus, according to the most recent federal data. California last year cited excessively high default rates in denying access to state tuition grants at 23 of the company's campuses. Over the last three years, attorneys general in eight states and the federal Consumer Financial Protection Bureau have probed Corinthian's recruitment claims and financial aid practices, raising the prospect of lawsuits.

Yet by the reckoning of the accrediting bodies that are supposed to scrutinize Corinthian's 97 U.S. campuses, its schools are meeting standards on student debt and adequately preparing graduates for jobs. Over the past decade, Corinthian's schools have remained fully accredited, enabling the publicly traded company to tap federal student aid coffers for nearly $10 billion, or more than 80 percent of its total revenues, according to a Huffington Post review of securities filings and disciplinary records maintained by its accreditors.

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