Major for-profit colleges like Corinthian, DeVry, the University of Phoenix and The Art Institutes receive about 90 percent of their revenue from federal money including Pell grants and federal student loans. For years the US Department of Education has been giving millions in federal student aid to college chains like Corinthian with the intent of boosting employment rates. But many of the colleges have been taking advantage of the system by aggressively, deceptively recruiting students–some who couldn’t speak English, some who didn’t understand the loan forms they signed. And for those who did enroll, schools like Everest (a subsidiary of Corinthian) reported false job placement rates (claiming 72% when it was really 23%). This week, the US Department of Education announced it is forcing Corinthian to close all 97 of its schools.
Why should you care? For-profit college students make up only 12% of students nationally, but they comprise almost 50% of all loan defaults. The average student debt is $30,000. Even if you never step near a campus, it hurts your wallet.
