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California AG Steps Up Actions To Stop Alleged False Advertising By For-Profit College

Logo for Corinthian Colleges, Inc. Just before the July 4th holiday weekend, the State of California Office of the Attorney General filed a motion in its lawsuit against Corinthian Colleges, Inc. (CCI):

"... asking San Francisco Superior Court for permission to move on an expedited basis to file a supplemental complaint enhancing the original complaint Harris filed against CCI in October 2013, which accused the company of false and predatory advertising, intentional misrepresentations to students, securities fraud, and unlawful use of military seals in advertisements. Wednesday’s motion also indicates Attorney General Harris’ intention to subsequently move for a temporary restraining order and/or preliminary injunction against CCI to force the company to immediately cease its misleading advertisements and inform prospective students about its dire finances."

The California AG office had filed a lawsuit against CCI in October 2013. In a document filed with the U.S. Securities and Exchange Commission on June 19th, CCI informed investors of its serious financial troubles and plans to close or sell its campuses. During the last week of June, CCI signed an agreement with the U.S. Department of Education to close or sell its campuses.

On Monday of this week, the Denver Post reported that the company will sell 85 campuses:

"... including three Everest College campuses in Colorado and WyoTech in Laramie... Corinthian spokesman Kent Jenkins Jr. said WyoTech and Everest College campuses in Colorado Springs, Aurora and Thornton continue to enroll new students and hold classes for those seeking associate's degrees or diploma certifications. A fourth Everest Campus, in North Aurora, was put up for sale in September and stopped enrolling students in February. Corinthian enrolls 72,000 students nationwide, who receive $1.4 billion of federal financial aid annually..."

False and deceptive advertising by for-profit schools is a problem. Consumers don't get the benefits they paid for and taxpayer money (federal and state) is wasted for veterans' education. According to the Center For Investigative Reporting:

"... $600 million dollars in GI bill money had gone to hundreds of for-profit schools in California with low graduation rates and high rates of student loan default."

California AG Kamala D. Harris said in a statement:

"It is unacceptable yet not surprising that Corinthian Colleges continues to illegally target vulnerable Californians—including low income individuals, single mothers and veterans returning from combat—by lying about its dire finances and failing to tell prospective students that the schools to which they apply will all be sold or closed... My office is seeking expedited action to force Corinthian Colleges to put the interests of its students above its rapidly shrinking profits.”

It is a stark and sad reminder that for-profit entities, by design, will put their interests in profit-making ahead of all other interests.

[Editor's Note: Corinthian spokesperson Kent Jenkins, Jr. and I are not related.]


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