Why You Should Celebrate the Collapse of Corinthian College

Corinthian Colleges is closing its remaining 28 campuses. After being fined $30 million by the U.S. Department of Education for misrepresenting reports of student success (job placement statistics, grades, attendance, and graduation rates), the corporation has stopped trying to find buyers for the remaining campuses and informed students and teachers that they are shutting down.

Due to the closing and the government's finding that Corinthian was misleading consumers, students will likely have their federal student loans discharged (most likely at taxpayer expense). In March, ATTN: reported that Corinthian students were withholding student loan payments in response to what they said were Corinthian's predatory practices. 

For-profit colleges are only allowed to make 90 percent of their money from federal student loans, and critics argue that they, in turn, increase the cost of tuition to increase the amount of government funding that they can receive. The average cost of tuition and fees at a for-profit institution was $15,130 in 2013, 70 percent higher than in-state tuition at a public university. After signing up and taking out loans, some students find that classes are not rigorous, teachers are not consistent, and students are not learning at a college level. If students want to transfer, many discover that they cannot, as for-profit credits are frequently non-transferable to other schools. If they decide to stay and graduate, some students discover that their degrees do not mean much on the job market. For example, Corinthian was sued for falsifying the employment rates of their students in advertisements. 

Generally, the numbers on for-profit colleges aren't great. A 2010 report found that full-time students graduate for-profit colleges at a 22 percent rate. In comparison, their cohorts at public and private, non-profit universities graduate at 55 and 65 percent, respectively. Seventy-two percent of programs at for-profit colleges produce graduates who end up making less than high school dropouts, according to data released last year by the Department of Education. The biggest strike against for-profit colleges, however, is their high, student-loan default rate. The Department of Education said last year that 19 percent of students at for-profits default within three years of entering repayment (presumably because they cannot find good enough jobs to make payments). Public, non-profit colleges, on the other hand, have a 13 percent default rate. Private, non-profits have a seven percent rate.

Corinthian's decision to close its remaining campuses was shortly followed by an announcement that DeVry Education Group, another for-profit college, would be closing 14 locations.