Congresswoman Speier Urges Federal Oversight of For-Profit Colleges in Wake of Corinthian Closures

Congresswoman Jackie Speier met with Bay Area college administrators this morning to discuss the lack of federal oversight that led up to the abrupt closure of for-profit college franchise Corinthian Colleges Inc. and its 28 campuses, including Heald College in San Francisco, last week.

Speier (D-San Francisco/San Mateo) spoke with college administrators today about opportunities for roughly 16,000 students who were negatively impacted by the closure of Corinthian Colleges. Administrators at non-profit community and state colleges offered their support to displaced students who want to transfer in or start their education anew.

The closure of Corinthian Colleges’ 28 campuses last Monday came just two weeks after the U.S. Department of Education levied a $30 million fine on the company. The federal government concluded that Corinthian Colleges had misled students about job placement opportunities, graduation rates and loan repayment rates.

On Monday, a week after its closure, Corinthian Colleges filed for bankruptcy, according to the U.S. Bankruptcy Court in Delaware.

Speier compared the company’s predatory lending program that impacted thousands of students at Corinthian Colleges to the predatory lending programs that led up to the 2008 financial meltdown.

She said the company saddled students with a horrific amount of debt, just as subprime mortgage lenders did.

“I mean they were a fraud,” Speier said of Corinthian Colleges today.

Speier explained that for-profit college franchises across the country need to be better regulated and that the U.S. Department of Education needs to be given the teeth to prevent exploitation of students before it happens again.

However, because of the heavy hand and deep pockets of for-profit schools, Speier said any regulations against them have been “watered down” on a national level.

She said the U.S. Department of Education’s most recent attempts to create accountability and oversight of for-profit colleges were defeated.

According to Speier, Corinthian Colleges alone spent $600,000 on lobbyists last year, and over the course of roughly the last six years, “they have given over $1 million in campaign contributions to federal candidates.”

The congresswoman pointed out that 2016 presidential candidate, Florida Senator Marco Rubio, is among those who have received campaign contributions from Corinthian Colleges.

Students who were enrolled at Corinthian Colleges at the time of their closure do have a couple options, however. They can choose to transfer credits to other institutions or start anew at another institution. If they start anew that will have their student debts extinguished, according to the congresswoman.

“It’s a very twisted situation,” Speier said, explaining that those students who do not want to start fresh and who choose to transfer are currently ineligible for loan forgiveness.

Esther Howard, a 24-year-old South San Francisco resident and mother of three children, was enrolled at Heald College in San Francisco when Corinthian Colleges shuttered last week.

Howard said she had been studying at Heald College for two years and had only three months left before graduating from a medical assistant program.

With top grades, Howard received a medical assistant certificate and landed a solid job with a private practice at St. Mary’s Medical Center, but she said she has racked up roughly $50,000 in loans while at Heald College and has not gotten her degree.

“I’m not going to say the education was bad, the education was great,” Howard said, adding that the problem was with the administration.

She said the administration, not the teachers, were to blame.

Howard described incredibly supportive teachers who taught her a great deal. While she doesn’t regret her decision to enroll at Heald College, she said she had no idea that it was a for-profit college and that there were less expensive options.

Speaking with representatives from San Francisco State University, City College of San Francisco and the San Mateo County Community College District today, Howard listened to her educational options and said she was leaning toward starting her degree over at a community college so that she will be eligible to get rid of her $50,000 debt.

Howard just discovered that academic credits at CCSF are only $46 a unit and additional grants could be made available to her. She said if she had known such information two years ago she would have started at a community college from the beginning.

“I didn’t know anything about college and just wanted something better for my children,” Howard said today.

Tuition and fees for some Corinthian programs were more than five times the cost of similar programs at public colleges. Internal documents obtained by the federal Consumer Financial Protection Bureau showed most students came from low-income families and were the first in their families to seek an education beyond high school.

California Attorney General Kamala Harris said she filed a complaint in 2013 alleging that Corinthian was targeting vulnerable populations and doing so by using false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs.

In September, the CFPB sued Corinthian for its allegedly illegal predatory lending program.

Harris said following the closures last week that while they were unfortunate for students, at least they would be able to “get out from under the mountains of debt Corinthian imposed upon them through its lies.”

She said federal and state regulators acted to prevent taxpayer dollars from flowing to Corinthian, which misled students and investors and preyed on the educational dreams of vulnerable people such as low-income individuals, single mothers and U.S. military veterans.

Corinthian’s chief executive officer, Jack Massimino, said in a letter to students posted on the school’s website, that Corinthian tried to find a qualified buyer to purchase its remaining campuses and keep the schools open. He said that as a result of “recent state and federal regulatory actions,” the company was unable to complete the sale and felt the only option was, after 152 years of operation, to close its doors permanently.

Speier said today that the federal government must stand up to lobbyists and better protect taxpayers from predatory companies.

She said that on a federal level, schools with high student loan default and low graduation rates need to be investigated and held accountable.

Corinthian Colleges lied about their rates and they were caught, Speier said, but she argued that other for-profit colleges in other states need to be held accountable as well.

Speier said the federal government should act immediately to ensure oversight on a national level to protect all students from predatory behavior but said “piercing the corporate veil” will be a challenge, especially when these companies spend aggressively on lobbying.

Hannah Albarazi, Bay City News

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  • 4n0nSFL

    All throughout high school I knew I enjoyed web design and
    development. I knew I enjoyed anything related to computers and
    technology. I knew that I would go to a technical college one day for
    the best hands on training in that field. This was in the early
    2000s. My internet connection wasn’t very fast so I didn’t use it
    that much. I did most of my research from books and by asking people
    their opinions like we grew up doing. I had never heard of the term
    for-profit-college before but I sure have heard of ITT Technical
    Institute. A technical college within 10 miles of my house that
    caters to exactly what I wanted to be. This is where my nightmare
    begins 11 years ago.

    My last week of high school, there were
    ITT administrators at the school talking to people and trying to
    convince them to come check out ITT’s campus. I knew all about ITT
    Tech as I had seen their commercials and knew a few people going
    there. I thought, hey I’m a techie kid, I might as well go check out
    this technical school and see if that’s the career path I really want
    to choose. Literally days after graduating high school I went to ITT
    Tech in Fort Lauderdale, FL (Davie) for a tour. I was feeling
    extremely ambitious about furthering my education and wanted to start
    college immediately. I could already tell that multimedia was the
    path I wanted to choose. I didn’t even take a summer break after high
    school graduation because I wanted to stay fresh on everything new
    happening in the tech world.

    As soon as I walked in the front door
    at ITT Tech, someone was waiting for me. It was Terry, the recruiter
    from my high school and I felt really comfortable. This guy was acted
    really cool, friendly, down to earth and so I trusted him. I trusted
    him to give me all the information I needed to make the right
    decision. Looking back, everything Terry told me was either an
    outright lie or a major stretch of the truth. Being an impressionable
    18 year old straight from high school, you tend to look up to these
    people that work at the college. You truly believe they are working
    for a respected organization and that they are respectable people.

    After touring the school for a bit and
    answering a few of my questions about the programs, he brings me to
    the entrance exam room. It’s just a regular office with a cubicle and
    a computer in it. They give you 15-20 minutes to take a short test
    with a bunch of math problems. I’ve always been terrible at math and
    I kind of figured I flunked the entrance exam. To my surprise, Terry
    comes back in and informs me that I have passed the exam. I was
    thinking, “Wow I guess I’m smarter than I thought, awesome!”.
    I’ll never know what I actually got on that exam but my money goes
    towards fail.

    Now we’re in the extremely
    uncomfortable, high-pressure room where the contracts will be signed.
    I didn’t feel pressured or uncomfortable at the time because I didn’t
    know any better but looking back now, at age 30, it makes me cringe.
    Terry brings out the paperwork that I will be signing and tries to
    explain everything to me. He does a very poor job of explaining the
    loan situation, how much it will cost, and never mentioned an
    interest rate. I was just a kid, I didn’t know anything about loans
    and interest rates. They don’t have a class that teaches this stuff
    in high school to prepare you for these predators. Private loans were
    never once mentioned at all in the entire meeting nor throughout my
    entire 2 years there. All they would tell you is that you need to
    fill out this form to continue your schooling here. If that’s not
    predatory lending then I have no idea what is.

    To read through that entire contract
    would take at least a week of studying it and a lawyer to interpret
    it, but they want you to sign with them right there in the office.
    They tell you that if you don’t sign today, you might miss out on
    being admitted to the school due to maximum capacity. Terry knew at
    that point that I wanted to start college as soon as possible after
    high school and he used that against me. He said if I miss out on
    admission that I would have to wait until the next semester.

    My first day of school at ITT Tech was
    almost embarrassing. It was like going to high school all over again.
    The teacher had us all stand up and say our names and two things
    about ourselves. Weird. Then we proceeded to take turns reading out
    loud from a book. Again, very weird. Not what I was expecting college
    to be like, but ok, it’s only the first day.

    I won’t bore you with all the details
    of every class but a common pattern I noticed was a complete lack of
    supplies. Almost every classroom / lab had students sharing computers
    or sharing something else because there weren’t enough for everyone.
    In one of the web design classes, Adobe Photoshop was extremely
    outdated. I believe Photoshop CS2 was out at the time (2004-2006) and
    they were still using a version from the 90s, Photoshop 5.5?

    We did occasionally get current
    software. The only problem is that IT WAS PIRATED SOFTWARE! In fact,
    most of the computers there had pirated software which I believe is a
    federal crime. Among the software being outdated or pirated, the
    computers were all very outdated and slow. All of the work that we
    were supposed to be doing during lab time now has to be taken home
    where it can be worked on using our own current generation software /
    hardware. I believe the point of lab time is to be able to do your
    work at the school while also being able to use the teacher and other
    resources for guidance. How am I supposed to do that when everything
    is done from home?

    Outdated and lack of equipment wasn’t
    the only problem. Teachers were getting fired on a constant basis. I
    think almost every class I took had at least 2, sometimes 3 teachers
    come and go. A teacher would get fired mid-way through the course and
    then a new teacher would come in. The new teacher would always come
    in teaching something completely different than where we left off.
    Every so often you would come to class and there wouldn’t even be a
    teacher there that day so we were just sent home. One teacher even
    told me that you don’t have to do anything here because I’m going to
    pass everyone. He was fired shortly after that but sure enough,
    everyone passed. Even the kids who didn’t show up for class got
    passing grades. Most of the teachers would completely disregard the
    very expensive books that we paid for and not even use them. Some
    teachers would read directly out of books that were purchased from
    Barnes & Noble.

    Career services is another major
    disappointment at this school. They would look for potential job
    offerings for students on websites like and They actually had the nerve to offer me a $10 an hour
    position in a warehouse answering phones that I declined. Those are
    not the types of jobs I was promised to be set up with. I went out on
    a hunt for months every single day to finally land a job that is
    some-what in my field.

    in all, I find the education I received at ITT Technical Institute in
    Fort Lauderdale, FL to be EXTREMELY lacking and I absolutely did not
    get even close to what I paid for. I experienced predatory lending,
    false advertisement, lies, altered grades and gpa’s, lack of
    equipment, outdated or pirated software, unknowledgeable teachers,
    teachers getting fired left and right and a career services
    department that tries to find you a job from Craigslist. I shouldn’t
    have to pay for something that I never received.

    Nine years later, I’m still paying
    close to $450 a month for these loans and have absolutely nothing to
    show for it. Most of them are high interest private loans that I was
    never told about. I can’t use ITT Tech on my resume because no
    employer will take it seriously. It’s almost like I never went to
    college at all but agreed to pay someone close to 60K just for the
    hell of it. Don’t be like me. Don’t go to ITT.0