MILWAUKEE — At its peak in 2010, Corinthian Colleges, Inc. enrolled more than 110,000 students at 105 campuses nationwide, according to data from Wisconsin’s Department of Justice.
The for-profit colleges it oversaw were Everest, Wyotech and Heald. Everest had a campus in Milwaukee until 2013, when it shut down less than two years after opening.
It’s one of a handful of for-profit colleges across the country operated by fraudulent companies.
La’Teesah Love-Minor is one of the students defrauded by Corinthian Colleges. She’s now 31 years old and has gone back to school again to study business and entrepreneurship at Milwaukee Area Technical College. She’s also raising three children.
“My kids are a factor in everything I do,” she said. “When I went to Everest, I was pregnant with my second daughter at the time, who is now 10.”
Love-Minor attended Everest College from 2010 to 2012 and graduated with a degree to be a medical administrative assistant. Hundreds of job applications later, she still had no job in the field.
“I stopped listing it on my resume because it was embarrassing,” Love-Minor said. “We found that out after we graduated that it wasn’t a real college.”
Documentation proves Corinthian targeted veterans and low-income women of color who were raising kids. The company spent more money on advertising to these populations than it did on instruction. Love-Minor said the commercials for Everest College are what drew her in.
“It just seemed like everything was going to be so perfect and everything seemed so simple,” she said.
Then, the trouble began.
“You would get pulled into the office and be told you have to take out this loan so you can pay for the next semester,” Love-Minor said.
Retired MATC professor Michael Rosen taught economics at MATC and has been in higher education for 29 years. He said he’s heard this story from more students than he can keep track of.
During the Great Recession, there was a for-profit college boom.
And many students enrolled at one of these now defunct for-profit colleges under the guise that their education would be free.
“Then, after a semester or two, they’re told they don’t have sufficient funds and that they have to take out a student loan,” Rosen said. “They’re already in six months, or a year and they want to graduate because they’re trying to better their lives and the lives of their children.”
MATC is a majority-minority campus, right down the street from where Everest College set up shop. Rosen said that was a strategic move.
“These for-profit colleges target single women who are Black and Latino with families and veterans,” he said. “They are people who want to make a difference in their lives and who often have very little experience with higher education.”
Before Everest came to Milwaukee, Corinthian had already been slapped with a number of lawsuits. One was in California, which Corinthian settled for nearly $7 million. Issues such as poor job placement rates, misleading students and high dropout rates plagued the company throughout its existence.
In the meantime, it was collecting on billions of dollars in shares from federal financial aid funds under the 90/10 rule. Congress passed this rule in 1998. It caps the percentage of revenue for-profit colleges can receive from federal student aid at 90%. The other 10% of that revenue must come from non-Title IV sources.
“They looked at this city, which is a majority-minority city and is a city that has a 40% poverty rate and they saw it as a very lucrative market,” Rosen said. “They tell the students it’s free and sign them up on a Pell Grant and then tell them they don’t have enough money and get them to take out other private loans.”
A 2012 U.S. Senate report revealed that between 2001 and 2010, the share of Title IV Federal Student Aid funds flowing to for-profit colleges increased from 12.2% to 24.8%, and from $5.4 to $32.2 billion. These findings were a part of a two-year investigation into 30 for-profit college companies, including Corinthian. Together, the 30 companies got 79% of revenues from Title IV Federal Student Aid programs in 2010, up from 69% in 2006.
“The saddest part of it is even if these students graduated from an Everest, or a Sanford Brown, or an ITT Tech, they had a degree that was essentially worthless,” Rosen said. “The only thing they ended up with was huge debts, non-transferrable credits, no employment and broken dreams.”
A number of other for-profit colleges, including Sanford Brown and ITT Tech, also closed for similar reasons in Wisconsin. Click here to read the full list of colleges from Wisconsin’s Educational Approval Program.
In June of this year, the U.S. Department of Education announced it would forgive $5.8 billion in full loan discharges for 560,000 students nationwide who were defrauded by Corinthian Colleges. That included 3,320 students in Wisconsin, who would receive a cumulative $36.2 million.
“I’m thankful that it was forgiven, but my time isn’t, that I gave — I can never forgive them for that,” Love-Minor said as she looked at the old Everest College building.
Love-Minor’s saving grace was that she didn’t cap out on her financial aid at Everest under the 150% rule.
“What if I had,” she said. “Then, what?”
It’s a reality, Rosen said, that too many people have to live with.
“Just from the experiences I have heard and there are many, I think there are thousands of people just in the Milwaukee area that could never go back to college after that,” Rosen said. “We need to be investing in public higher education because we know that works.”
According to a report from Illinois Sen. Dick Durbin, for-profit students make up only 8% of college students and they’re 30% of the students who have defaulted on their student loans.