Corinthian Colleges, a scandal-plagued for-profit provider, will soon close its doors under an agreement with the Department of Education. The WSJ reports:
Corinthian, a publicly traded firm with 12,000 employees serving 72,000 students, negotiated a deal late Thursday with the U.S. Department of Education to sell off the bulk of its more than 100 campuses and wind down the rest. The company will receive an additional $35 million in federal funding to allow it to continue operations during the next six months.
Under the circumstances, we’re glad Corinthian is being shut down:
The attorneys general of California and Massachusetts had sued Corinthian over allegations the company misrepresented its training programs and pushed students into costly loans.The U.S. Justice Department, Securities and Exchange Commission and Consumer Financial Protection Bureau have been investigating issues including whether the company manipulated attendance records to retain federal education funds and misled students about their loan terms, according to regulatory filings.
This story is about more than a handful of ugly opportunists, however. The student loan system doesn’t work well for a large group of vulnerable people. It’s easy to get loans, and easy to get admitted to a college once you have them, but some of those students aren’t ready for college and often wind up with unfinished degrees and lots of debt.While some of the less scrupulous for-profit colleges exist simply to exploit the student loan system, this is also a problem at many community colleges and conventional non-profit institutions. It’s a bit like the housing bubble, in which the government encouraged people to buy houses they couldn’t afford as part of a social engineering scheme to increase the percentage of homeowners. In the same way, government policy is aimed at increasing college enrollment.The whole problem is compounded when colleges raise tuition and fees (because, thanks to student loans, they can). Again, the consequences fall hardest on the marginal students, often the first in their families to attend college and the least likely to be socially and academically prepared for college.
There are a few things both government and the private sector could do to help: scale back the number of jobs that require BAs, and put more emphasis on vocational programs and apprenticeship programs. The post-secondary education sector has to work much, much harder at finding affordable options for kids without a lot of money and at risk of not finishing.