Senator Dick Durbin Calls For Investigation of Corinthian Colleges and Other For-Profits
Merry Christmas to the for-profit college sludge. They fill their stockings with taxpayer monies and leave IOU’s for the citizens of America while stuffing debt socks for students.
As for profits continue to get $30-40 Billion annually from the feds (Pell Grants, VA benefits, government loans) and state colleges, community colleges, HBCUs and women’s colleges significant lose enrollment and go into debt…http://www.huffingtonpost.com/2013/12/19/dick-durbin-corinthian-colleges-_n_4476219.html

 

His letter to Arne Duncan is here:

https://www.documentcloud.org/documents/963206-duncan-letter.html

The sad fact is there have been five years of these so-called investigations by both Durbin and many other coin operated politicians.  Nothing has happened.  the for-profits continue to extract money from the US treasury while putting IOU’s in the pockets of students.  Don’t hold your breath on this investigation.  These politicians are paid for.  Can’t say it better.
Now, in the latest in a series of articles about Corinthian Colleges and their unethical business practices.  Tell me if this doesn’t sound like Enron before they fell.  In this case, Corinthian Colleges paid businesses to hire Everest graduates part time, to make their job placement rate appear much better than it was. 
 
“Former employees in career services offices at Everest College campuses in six states described a culture of data manipulation inside the company, one where hitting monthly employment targets took priority over finding quality positions for students. They told HuffPost that their supervisors instructed them to seek out potential employers with typically high turnover rates: That way, as one graduate left or was terminated, a spot opened up for another, enhancing the college’s job placement record.”
“Those who have worked and studied at its campuses say Corinthian is a powerful marketing machine finely calibrated to exploit hard economic times. Its business has grown swiftly during and after the Great Recession, which left tens of millions of Americans unemployed and many in search of the kind of training advertised by Corinthian’s schools. Between 2007 and 2011, the company’s revenues nearly doubled as enrollments soared from 62,000 to more than 93,000, according to securities filings. Corinthian’s ubiquitous advertisements — “A better career, a better life, a better way to get there” — have proved alluring for workers seeking a path to new livelihoods.”

Bonnie and Clyde: the corporate democrats and Richard Blum, the husband of Senator Diane Feinstein

As I have written, without the democratic machine the for-profits would not be able to get away with financial murder.  Take a look at Dahn Shualis’s letter to Blum Capital Partners dated December 16, 2013 and again on December 18, 2013:

Dear Mr. Duran,
“I am doing a journalistic investigation on California State Teachers Retirement System’s (CALSTRS) investments in Corinthian Colleges (COCO), given Corinthian Colleges’ record of misleading potential students (including veterans and people of color), their judicial record in California (lawsuits by the California Attorney General), active student lawsuits, and recent federal investigations by the Consumer Financial Protection Bureau (CFPB) and the Securities and Exchange Commission (source: http://www.huffingtonpost.com/2013/10/10/corinthian-colleges-for-profit-lawsuit_n_4081000.html, http://www.huffingtonpost.com/davidhalperin/finally-a-chance-to-curb_b_4283713.html).
According to California State Teachers’ Retirement’s website, CALSTRS owned 150,448 shares of COCO as of 6-30-2013.  NASDAQ.com reports an investment of 142,535 shares as of 9-3-2013 (source: http://www.nasdaq.com/symbol/coco/institutional-holdings/increased?page=2).
Although the American Federation of Teachers (AFT) has not publicly called for divestment yet, I’d like to know what CALSTRS’ current position is on Corinthian Colleges-and what they need, specifically, from teachers, public employees, students, and taxpayers to consider public divestment. It is notable that CALPERS, the public retirees system in California, has reduced its investment in COCO by 80% in this financial quarter.
I understand that much of CALSTRS investments are “passively managed,” but I imagine that CALSTRS has the same information that we have about Corinthian Colleges’ wrongdoings.   I also know that CALSTRS has the capacity for shareholder activism (source: http://www.proxydemocracy.org/admin/voters/114)
Thank you in advance for your reply.
Dahn Shaulis, Ph.D.” (e-mail, December 16, 2013).
“Let’s see if Blum Capital Partners will respond.  It seems like the Dianne Feinstein/Blum Capital Partners scandal with for-profit schools hasn’t been talked about for almost three years.
Here was the Blum machine’s response:
“Dear Dahn Shaulis,Thank you for contacting Blum Capital Partners. Your inquiry has been passed to the appropriate person.

Blum Capital Partners, LP” (e-mail, December 16, 2013).

Maybe after Blum has sold all the public post offices he can to friends, his company might respond.  But then the response will be vague, obfuscation and lies.  As to his wife: she is a petty criminal posing as a liberal.  The truth is that it’s not just a few Democrats joining the Republicans, it’s also the Democratic machine that includes Dianne Feinstein, Ed Rendell, and Jerry Brown, the complicity of Democratic media icons such as Al Sharpton, Ed Schultz, and Rachel Maddow, and the self-censorship of mainstream outlets such as MSNBC and the NY Times that keep this charade going.

In an e-mail to the American Federation of Teachers, whose support for for-profit colleges is indicated in their investments in their stocks, Dahn Shaulis, researcher, investigator and professor penned this to Craig Smith of AFT:

Craig,

“Senator Dick Durbin is asking Arne Duncan for a federal investigation of Corinthian Colleges.  Will you now ask CALSTRS and CALPERS to divest? It appears that CALPERS has already cut its position by 80% this quarter” (e-mail 12/21/2013).

Union members must take refuge from their long nap and begin to force disinvestment.  Alas, this seems to not to be happening.  The pension funds are saddled up with for-profit stock, thus undermining the public commons and community and state colleges.
Perhaps you should write directly to Craig Smith of AFT (csmith@aft.org).  After all, he says he represents unions.
More on CALSTRS and the pension fund sell-out
Here is a letter to CALSTRS from Dahn Shaulis:
“Dear Mr. Duran:
So what CALSTRS (Christopher J. Ailman, the Chief Investment Officer) is saying is that if CALSTRS sells stock in this predatory company, that someone else will buy it.As CALSTRS officials know,  Corinthian Colleges (Everest, Wyotech, Heald) is responsible for putting working class Californians, particularly veterans and people of color, into lifetime debt bondage.  Given that this situation is well documented, I would have expected a better answer.

In sociology, we call this response a “technique of neutralization,” an excuse or rationalization for immoral behavior and avoiding a negative label.  But it’s also complicity in this predatory for-profit higher educational system-by public school teachers themselves.  Even if someone else buys the stock, the stain will be off the hands of California teachers and retirees.

It is notable that a CALPERS official has informed me that the organization has cut its investment in Corinthian Colleges (COCO) by 80% in this quarter.
I will give CALPSTRS time to answer this email with more thoughtfulness, before we publish the enclosed letter.  Please let me know how much time you need” (e-mail 12/19/2013).

More on Corinthian

This is the best document I have seen regarding “third party lenders” who collect on predatory student loans at for-profit colleges.
Genesis Lending and Corinthian Colleges are mentioned several times. Unfortunately, there is no mention of the connection between the big banks (e.g. Wells Fargo, Goldman Sachs, Barclay’s, Deutsche Bank) and predatory lending (e.g. Genesis Lending).
Some important points:
Corinthian students were heavy users of private loans. In 2007, private loans represented 13%, of Corinthian’s total revenues, with Sallie Mae providing about 90% of these loans. 29 Sallie Mae notified the company in 2008 that it would no longer provide private loans to its students.
In an August 2009 conference call, Corinthian management referred to the company’s internal lending program as the Genesis Discount Lending Program. Corinthian described Genesis as a company that specializes in subprime credit. Genesis has described itself as a company that serves the most credit-challenged applicants.30 This program replaced the prior institutional loan program called STAR.
Corinthian described a process of “ramping up” internal lending throughout 2008 and 2009. In order to increase the amount of loans funded, the company was focused on decreasing the amount of time needed to fund the loans. Among other actions, this involves shortening the funding cycle so that more loans can be funded.31
Corinthian lent about $120 million in institutional loans for both of the years ending June 30, 2009 and 2010. It expected to lend about $150 million in FY 2010.32
The Genesis program has some similarities to previous Corinthian institutional loan programs. Under the Genesis program, Corinthian pays a discount to Genesis, the origination and servicing provider, as a reserve against future defaults. Corinthian records the discount as a reduction to revenue. However, unlike the previous private loan programs, under the Genesis program, Corinthian has both the right and an obligation to acquire the related loans, except in very limited circumstances. Corinthian bears the risks of collections. Since initiating the program in 2008, Corinthian says it has acquired all of the loans that have been originated.33
Another part of the article explains the confusion that student-lenders face. Who actually owns their loan?  This sounds remarkably similar to problems that mortage holders have had during the housing crisis/mortgage meltdown

“The confusion is compounded because so many schools use third party lenders to makeor service the loans. Corinthian’s relationship with Genesis is an example of this type of affiliation. Corinthian retains the risk, but Genesis is usually the company that collects. One student in an on-line complaint said he only found out long after he left the school that despite Genesis’s aggressive collection efforts, “ . . . Genesis is just a service center, not the owner of my loan. 67”

Corinthian Colleges, University of Phoenix and other For-Profit Colleges are receiving a barrage of critiques from news bloggers.  Here’s the latest critique from investigative historian Eric Zuess:
“It’s happening yet again; but, this time, the aristocrats are skimming their gambling-gains not from other people’s mortgage debts (and bum MBS securities), but from student debts (and bum student-loan portfolios) — the very same category of debts that are now soaring because the public are competing ferociously for academic degrees to appeal for jobs in a stagnant employment-market where not having a degree-certificate means a virtual lockout from all but the lowest-paid jobs, and where even the bottom jobs are increasingly requiring academic certification so that employers can plough through the hundreds of applicants for every job-opening and simply discard all applicants who aren’t certificated. In other words, the economic losses by the bottom 90 percent of the U.S. population produced desperation, which has caused millions of poor people to take on student debt, hoping to get out of desperation.”
For-profit colleges constitute only a small portion of federally-backed loans, but almost half of loan-defaults:

For-profit colleges today have 13 percent of all college students — but 47 percent of student loan defaults. The real cost to a student of a year at one of the major for-profit schools can be almost twice as much as attending Harvard, yet many for-profit college graduates, aiming for careers in health care and high-tech, struggle to find jobs beyond the Office Depot positions they could have obtained without a degree. The people whose financial futures are ruined by predatory for-profit schools are veterans, single mothers, immigrants, and others struggling to build better lives.”

 

“David Halperin headlined at Huffington Post also on the 16th, “Corruption Threatens Obama Action on For-Profit Colleges,” and he reported that Republicans and a few Democrats were trying to water down the Obama administration’s proposal to hold colleges responsible for providing degrees and courses that employers want from job-applicants, in order for them to be able to receive federal subsidy. “Since 2009 the Obama administration has been seeking to issue a rule that would implement a requirement written into law that federal money go only to those career education programs that actually prepare students for ‘gainful employment.'” Halperin makes clear:

Under this current draft of the gainful employment rule, only 13 percent of current career education programs would be at any risk of losing eligibility for federal aid, and no school would face penalties until 2018. That’s far too lenient. … Far more than 13 percent of current programs are bad for students and are unworthy of taxpayer support. The major for-profit college companies — including Apollo (University of Phoenix), Education Management Corp. (The Art Institutes, Brown Mackie), Kaplan, ITT Tech, Career Education Corp. (Sanford-Brown, Brooks, Cordon Bleu), and Corinthian Colleges (Everest, Heald, Wyotech) — disserve and abuse a significant percentage of their students.”

CALSTRS and Corinthian College

It appears that CALPERS (California public service workers pension) has drastically reduced its position in Corinthian Colleges this quarter, but there has been no press on that.  If CALPERS is divesting, why isn’t it being made public?

Here is a message from Mr. Duran of CALSTRS dated the 16th of December.  Nothing has materialized

“Hi Dr. Shaulis:
I’ve alerted our people in the investment division about your inquiry and we are working on your request. You should be receiving a letter within the next few days with our response.

Please let me know when you’ve received it and if it meets your needs.

Best wishes,

 Ricardo Duran

Media Relations

California State Teachers’ Retirement System

Newsroom@calstrs.com

(916) 414-1440

One Mission, 100 Years: Securing the Financial Future of California’s Educators

Whose Duran and CALSTRS kidding?  They are emptying the coffers of teacher pension funds and CALSTRS is simply spitting in the wind, “to secure the financial future of California Educators.”

On the layoff.com, former workers and students are getting even more angry (read from bottom, up).

source: http://www.thelayoff.com/corinthian-colleges

Anonymous1749, Wednesday 12/18/13 11:26:58 UTC

More like a car wreck!

I think car dealerships are more honest and upright with their customers than CCI, at least you can see your product and use it! I know many think we are all a bunch of disgruntle workers on this site but I’ve got years of experience working for CCI and they are a disservice to any and all institutions. I’ve seen it all with my own eyes and begged every day that the economy would pick up just so I can distance myself from them permanent which I eventually did. I hope their doors are locked shut tight some day.

Anonymous1747, Wednesday 12/18/13 06:57:08 UTC

CCI employee for 5 years.

CCI is the epitome of evil.Its all about money. And every employee there is constantly in fear of losing their job. The president blatantly threatened admissions reps jobs last month. Basically this is a used car dealership.

Former CCI employee (Wyotech), Tuesday 12/17/13 15:48:48 UTC

A complete joke!

I was laid off from Wyotech earlier this year and looking back I am embarrassed that I ever worked for this school. The managers and Vice Presidents sleep around and drink with employees and discriminate beyond belief. What a joke! Judgment day is coming. The pride, arrogance, and gross mismanagement is catching up with them. The way they treat thier emoployees is a tragedy. Don’t go to school here. Run for your lives!

Anonymous1681, Tuesday 12/17/13 01:26:34 UTC

AS EASY AS A B C…

Low or NO ENROLLMENTS, NO RE-ENTRIES MEANS NO SCHOOL!!!! NO SCHOOL NO OUTRAGEOUS LOANS/DEBT/DEFAULT THAT WE ALL WILL SUFFER THE CONSEQUENCES WITH. CREDITS ARE NOT TRANSFERABLE- THAT IN ITSELF REGARDLESS OF THE COMPANY AND POOR REPUTATION SHOULD TELL YOU TO STAY AWAY!!!! GO TO A COMMUNITY SCHOOL AND IF THAT IS HARD FOR YOU, GET SOME ONE ON ONE TUTORING SO YOU CAN MAKE IT THROUGH.

Anonymous1680 (Former Career Services), Tuesday 12/17/13 01:22:25

Nothing surprises me….

I don’t doubt that they purposely hire Everest students for temp jobs just to improve their numbers- everything they do is motivated by eluding the government that For Profit is working. Horrible, if I were an admissions rep I could not look myself in the mirror- I tried to help students, really I did but it was so mismanaged that I was one of few who quit. Those I worked with including our Director was sleeping around and not focusing on sincerely helping students. I hope students get to read these and start spreading the word, but if they are ignorant or feel agencies like Unemployment are backing them up it looks like they are legitimizing it or why would agencies be involved. MONEY, MONEY MONEY, GREED GREED GREED…

Anonymous1645, Monday 12/16/13 20:31:17 UTC

Friends don’t let their friends go to CCI schools

It’s that simple. If you were ripped off or were a frustrated instructor then simply tell your friends NOT to go to a CCI school. If the enrollment heads off to ZERO then CCI goes out of business. If it sounds simplistic then it is because it is that simple.

Former Student, Monday 12/16/13 18:29:27 UTC

So glad now that Everest Colleges is included in the CCI, Hall Of Infamous Con/Scam Artists Club feel freely to vent on Heald, Wyotech & Everest

Anonymous1626, Monday 12/16/13 07:14:11 UTC

Heald College instructor class size to increase

Heald College class sizes are about to go to 50 students as CCI will not be replacing those that quit. The “cattle” will simply be stuffed 50+ to a room.