Today I got a call from Everest University, asking if my company needed any interns. I let them know that I was aware of the Everest College fraud, that we are fraud investigators, and that no, we would not do any business with them. What am I talking about?
The State of Wisconsin has sued Corinthian Colleges Inc. for defrauding students in an effort to enroll them in their for-profit schools. For-profit colleges and universities tend to prey on young adults who are unsophisticated financially. They talk the students into taking out loans to pay outrageous tuition (high tuition, poor quality education). The students are happy because they have a chance to get a degree without paying much out of pocket now, not realizing that the crappy degree will never pay for itself (they will never earn enough at a job in their field to pay off the loans).
The complaint in this case provides interesting information on how Everest College ran its scam:
- A degree program took 8 to 12 months to complete
- Tuition was between $13,000 and $20,0000
- The Milwaukee location offered programs in dental assisting, medical insurance billing and coding, medical administrative assisting, medical assisting, and pharmacy technician
- The school didn’t have semesters. Students enrolled in month-long classes in a “wheel curriculum,” working their way through the wheel of courses.
- An externship of 160 hours (later changed to 200 hours) was required
- Deceptive marketing pieces were mailed to prospective students, claiming they were “approved” for a “career training assessment” or had other special status
- The school steered students toward programs in which they needed enrollment, rather than the programs the students preferred
- The school told prospective students that credits were transferable between programs, when the credits were not
Attorney General J.B. Van Hollen has alleged that Everest College Milwaukee deceived student in several ways. First, they were promised externships in their fields, but many never received them. While the school bragged to prospective students that 50% of the externships resulted in permanent employment, Everest Milwaukee didn’t even have enough externships set up to match the number of students who needed them. (The complaint states that 2/3 of dental assisting students didn’t get externships, even though the externship was supposed to be a requirement for graduation.)
Some who did receive externships found that they didn’t relate to their fields of study. (Apparently the call I received was an attempt to secure externship positions for students?)
Everest told the state that it would open the Milwaukee campus and build the enrollment to 600 students. The state was concerned about whether the school would be able to find externships for all 600 students. Everest College Milwaukee ended up enrolling 1,600 students by June 2012 (enrolling at a rate of about 100 per month). Why so many students? It was all about the money.
At the same time the school was letting anyone an everyone in, they were also losing students at a fast pace. (So, of course, we have to ask what is wrong with the school that students leave so quickly.) The school wanted students so badly that it was enrolling convicted felons in its health programs… despite the fact that their criminal histories would most likely mean they could never work in positions such as pharmacy technician, medical assistant, or massage therapist. More importantly, the lawsuit alleges that the high dropout rate was mostly due to the fact that a large number of students should never have been enrolled because they didn’t have important skills (such as reading proficiency) which were necessary to complete the program.
You see the problem here…. students are going in debt for degrees they will never be able to earn.
Despite telling new students that there was a career services department that would help them with “placement assistance throughout [their] career[s],” real help was not available to students or graduates.
The school is also accused of inflating job placement rates of graduates, which went as low as 5%. Everest/Corinthian ran advertisements that claimed placement rates of 80% to 90% nationwide. Everest personnel claimed they had a 78% placement rate for graduates in 2009. However the placement rates for Milwaukee were well below that, averaging under 50% at one point (if the school’s reported numbers are even to be believed). The figures then quickly dropped to 5%. Corinthian apparently admitted at some point that they counted as “placed” individuals who were not working in the area of their education.
In July, Corinthian Colleges entered into an agreement with the U.S. Department of Education regarding the winding down of operations. The company is selling, transitioning, or closing all of its campuses, presumably because the schools are so terrible.
Dear Everest University, please don’t call me again looking to place students in externships.