Education Department Directs Former Corinthian Students Toward Other Troubled Schools

Jose Luis Magana / AP

In the wake of the abrupt closure of the for-profit Corinthian Colleges on Sunday, the Education Department released official guidance suggesting that the school's 16,000 students transfer to a number of the industry's most troubled for-profit schools.

Among the schools on the Education Department's list of "viable transfer options" released to Corinthian students are ITT Technical Institute, which is facing a predatory lending lawsuit by the Consumer Financial Protection Bureau and investigations by 17 state attorneys general, and schools owned by EDMC, which is being investigated by the Department of Justice. Teetering on the edge of financial instability, EDMC has instituted mass layoffs and sold off several of its Art Institutes campuses.

The department also pointed students towards schools owned by Career Education Corporation, which settled with the New York Attorney General for $10 million over allegations that it had misled students and falsified education records. The school has a checkered past of investigations by the Department of Justice and the Securities and Exchange Commission.

“Has the Department of Education learned nothing?" said Dick Durbin, a Democratic senator, in a speech to Congress today. "How in good faith can they tell these Corinthian students–who just had their college disappear and are sitting on a pile of debt–that these are viable transfer options for their students?”

The Education Department did not respond to requests for comment.

Corinthian, which had itself been on shaky financial ground for years, was compelled to sell off its campuses last July in the wake of lawsuits by three state attorneys general and the Consumer Financial Protection Bureau. The Education Department struck a fatal blow to the 30 campuses Corinthian was unable to sell earlier this month by imposing a $30 million fine for misrepresentations to students; Corinthian announced that it was ceasing all operations beginning Monday.

In dealing with the thousands of Corinthian students left stranded partway through their degrees, the Education Department is facing a complex task. Corinthian's credits are not transferrable to most schools—even community colleges—because of its accreditation. Most schools that accept Corinthian's credits are themselves for-profits.

In releasing a list of "viable transfer options for students," the Education Department has a responsibility to "give them a full range of choices and allowing them to make those choices themselves," said David Bergeron of the Center for American Progress. "It's crucially important that we empower students to be in control of their educational experiences."

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