For-profit college grad refusing to pay back loans

[ttt]

It's just unbelievable to me that this is even allowed to go on. How can the government allow these "universities" to operate and be eligible for federal student loans when they're clearly scams??? 


www.slate.com/blogs/business_insider/2015/04/14/this_corinthian_college_grad_spent_37_000_on_a_computer_science_degree_and.html?wpisrc=obnetwork


At 28, Michael Adorno got fed up with his low-wage job at a pizzeria in Richmond Hill, Georgia, and decided to go to college. Adorno attended the for-profit Everest College, part of Corinthian Colleges Inc., in Colorado Springs, Colorado, from 2010 to 2012, and he received an associate degree in network administration.

Three years later Adorno is unemployed and was even rejected from a job at Best Buy. Adorno belongs to a group called the Corinthian 100, alumni of Corinthian Colleges who refuse to pay back their student loans and claim they were defrauded by Corinthian. Like other members of the group, he claims he got a subpar education and was left with massive debt and no suitable job.

Before 2014, Corinthian Colleges Inc. was a network of more than 100 schools and one of the largest for-profit college companies in the U.S. But numerous investigations and lawsuits alleging wrongdoing against the company rapidly decreased its size. In July, an agreement with the U.S. Department of Education forced Corinthian to sell 85 of its schools and close another 12.

As the first person in his family to attend college, Adorno was excited, but he admittedly didn't know a lot about higher education and financial decisions. "I felt especially proud to take this first step forward, because I thought maybe it would be a big role-model experience for myself, and to set that example for my friends and my brother," Adorno told Business Insider.

He said that he relied on the college to give him accurate information about financial aid, something he said did not happen. "It was such a rushed experience," Adorno said. "My student adviser, she was a great salesman. I don't understand why she wasn't selling cars or something else."

He said his adviser promised that he would not be on the hook for student loan payments until after he graduated. But he said that he started getting requests for payment on his loans while still at Everest. Still, amid a rushed process and some confusion, Adorno pushed ahead. "I was just ready—I was just ready, ready, ready, to pull the trigger on something that was going to lead me to a more prosperous future with a better career, like I said, instead of delivering pizzas," he said.

When Adorno got to Everest, he said, he was immediately disappointed. He said Everest sold him on the promise that he'd get hands-on experiences with emerging technologies that would prepare him for high-caliber IT positions. But Adorno ended up taking a lot of unnecessary gen-ed classes such as literature and oral communications, he said.

And when Adorno, who said he has had a lifelong interest in computer systems, finally got into the core classes of the degree program, he said he was shocked by the outdated technologies offered at Everest. "I mean, I was learning how to work with operating systems that were 10, 15 years old. ... Why, why on earth was I being taught on systems that were already obsolete, outdated?" he said.

Adorno told Business Insider that one of the most compelling reasons he attended Everest was its pledge to provide lifetime career placement services. But he quickly realized he couldn't find work in an IT department, he said. The only job that Adorno said Everest could get him was working in a call center administered by Xerox. The role was a customer-service position that didn't require a college degree.

He did not accept that job.

He looked into attending Colorado Technical University to pursue a bachelor's degree, but when he went there he discovered some of his classes didn't transfer. He'd have to incur even more debt, which he said would "again lead me to keep plunging down the hole." Adorno eventually moved back to Georgia, where he took a job as an assistant manager at a Little Caesars. He said he was demoralized after attending Everest and didn't think he had any other options.

"I had to kind of pull myself back together and stop chasing that dream," Adorno said, "because there was no call-backs when I started looking into local technical recruiters. I wasn't getting any calls back with the info on my résumé having gone to Everest. I almost felt that, because I had that on my résumé, that's why they might not be calling me, because they might have intimate knowledge of their practices."

Now, at 33, Adorno has moved in with his mom, in Alexandria, Virginia, and is unemployed, but he said he is using the time to find an entry-level position in IT in or around Washington, D.C. He voiced frustration at getting rejected from a job with the Geek Squad at Best Buy. He is trying to remain upbeat, though he has no serious job leads. "Again, I feel a lot of it boils down to the fact that they are looking at the whole Everest thing," he said.

He spoke about the $37,000 of student-loan debt that he's been deferring for the past three years. He and the other members of the Corinthian 100 are trying to get the Department of Education to discharge that debt. "What I expect to see is a full discharge of these loans so that I can reclaim a better chance at higher education," he said. "I still want to be able to go back to school."

We reached out to a representative for Corinthian for comment on Adorno's experience, and we will update this post if we hear back. Previously, the company told us in a statement that "career colleges like Corinthian play an important role in the U.S. education system and serve a need that would otherwise be unmet."

[mcfelix]

I agree - there needs to be some sort of government involvement. These colleges are fraudulent, plain and simple. They prey on people who don't know any better and feel like this is their path to something better when it often is only a path to further financial hardship.

[aprilsails]

I attended a high ranking Canadian university and half of my classmates were computer engineering majors (I was in electrical engineering). The faculty had such a hard time keeping classes relevant for the software and hardware engineers since industry moved so quickly but they really did their best and everyone I know came out of that program and moved on to serious employment or graduate level studies.

I came out with an engineering degree and $28,000 in debt after 4 years. This was a fair trade as I received a good position immediately and had that paid off within 2 years. For your education to actually be a scar on your resume and to have paid that much for it is a disgrace. I can absolutely understand why the graduates are banding together to refuse to pay the fees. They were sold a bill of goods. I can see future class action lawsuits coming out of this.

[ESF]

Apr 25, 2015 17:52:13 GMT -5 aprilsails said:

They were sold a bill of goods. I can see future class action lawsuits coming out of this.

Actually there were class action lawsuits. There was one against Corinthian Colleges alleging a very specific federal student loan scam that violated California consumer protection laws. But because of Supreme Court cases in 2011 and 2013, the lawsuit was thrown out of court last year. There are class action waivers and mandatory arbitration agreements in the enrollment paperwork, which were not enforceable until the Supreme Court changed the law.

The good news is that there was immense pressure, and earlier this year, the Department of Education and CFPB worked out a deal with Corinthians the arbitration provisions were removed from prospective students enrollment. As I understand it though, past students are still stuck.

[ttt]

Apr 25, 2015 18:53:31 GMT -5 ESF said:

Apr 25, 2015 17:52:13 GMT -5 aprilsails said:

They were sold a bill of goods. I can see future class action lawsuits coming out of this.

Actually there were class action lawsuits. There was one against Corinthian Colleges alleging a very specific federal student loan scam that violated California consumer protection laws. But because of Supreme Court cases in 2011 and 2013, the lawsuit was thrown out of court last year. There are class action waivers and mandatory arbitration agreements in the enrollment paperwork, which were not enforceable until the Supreme Court changed the law.

I wish this had been discussed in the article!! People need to know what is going on and why those decisions were so important!! 

[ESF]

Apr 25, 2015 19:07:27 GMT -5 ttt said:

Apr 25, 2015 18:53:31 GMT -5 ESF said:

Actually there were class action lawsuits. There was one against Corinthian Colleges alleging a very specific federal student loan scam that violated California consumer protection laws. But because of Supreme Court cases in 2011 and 2013, the lawsuit was thrown out of court last year. There are class action waivers and mandatory arbitration agreements in the enrollment paperwork, which were not enforceable until the Supreme Court changed the law.

I wish this had been discussed in the article!! People need to know what is going on and why those decisions were so important!! 

You know how movie studios have people that go through scripts and look for product placement opportunities? Well, I want a version of that job where I go through articles before they are published to look for opportunities to share with the world how terrible the Roberts Court is.

[ESF]

consumerist.com/2015/04/30/legislation-would-end-forced-arbitration-in-student-enrollment-agreements/

<)
Legislation Would End Forced Arbitration In Student Enrollment Agreements
By Ashlee Kieler April 30, 2015
(sparkle-motion)
(sparkle-motion)
When Education Credit Management Corporation announced late last year that it would buy 56 of for-profit education chain Corinthian College Inc.’s Everest University and WyoTech campuses, consumer advocates expressed great concern that the new company – which would operate under the name Zenith – would continue the unfair practice of requiring students to sign away their right to seek any legal action against the company if they’re wronged. While ECMC ultimately said it would do away with the practice, new legislation aims to strengthen students’ legal rights when it comes to forced arbitration.

The Court Legal Access & Student Support Act (CLASS) – introduced to the legislature by Sen. Dick Durbin of Illinois and Rep. Maxine Waters of California – would prohibit any school receiving student aid funding from the Department of Education from including any restrictions on students’ ability to pursue legal claims, individually or with others, against higher education institutions in court.

Durbin and Waters say their new bill [PDF] is an attempt to end the growing, strategic use of mandatory arbitration and class action waiver clauses in enrollment agreements by all education institutions.
The use of arbitration clauses have skyrocketed by companies – including those focused on education – since 2011, when the U.S. Supreme Court affirmed that it was perfectly okay for companies to take away a consumer’s right to sue or their ability to join other wronged consumers in a class action case by inserting a paragraph or two of text inside lengthy contracts.

By using arbitration clauses, for-profit colleges such as CCI have shielded themselves from taking responsibility for their own alleged deceptions such as misrepresented job placement statistics.
Colleges that use arbitration clauses also retain the right to choose their own arbitrator and other key aspects of the potential dispute resolution process.

“For years, unscrupulous for-profit colleges have enriched themselves by devouring billions in federal student loan dollars while leaving students with worthless degrees and a mountain of debt,” Durbin said in a statement. “The practices of requiring binding, mandatory arbitration or prohibiting students from seeking a jury trial or bringing class action suits against a company unfairly stacks the deck against students.”

The most recent case of forced arbitration in student enrollment agreements came to a head this week when Corinthian Colleges announced it would close its remaining campuses.

“If this bill had been law in the last several years, students defrauded by the now-failed Corinthian Colleges would have been able to seek redress from the courts and relief directly from the school,” the legislators say in a statement.
CCI, which is party to a number of federal and state investigations, allegedly engaged in fraudulent conduct at its campuses across the country, including misrepresenting the quality and success of its programs.

Although several investigations have found basis for the allegations, students at the schools have had few options for recourse because of the binding arbitration clauses in their enrollment agreements.

“This legislation will take bold action toward eliminating these types of provisions, putting an end to many troubling practices and ultimately giving students’ back the right to their day in court,” Waters says in a statement.
While ECMC, which completed the purchase of more than 50 CCI campuses in February, said it would refrain from using such clauses in its new enrollment agreements with former CCI students, Durbin says that simply isn’t true. He pointed out during a speech on the Senate floor earlier this year that ECMC continues to limit students’ legal rights through the fine print of enrollment agreements, spreading the unfair practice into the non-profit sector.

The CLASS Act was quickly greeted with support from a number of consumer and student advocacy groups including the Center for Responsible Lending, Consumer Action, the Consumer Federation of America, our colleagues at Consumers Union and the National Consumer Law Center.

In a statement [PDF] released about the legislation, NCLC said it strongly endorsed the bill.

“For-profit schools that defraud students should not be allowed to use forced arbitration before a biased, secretive, and lawless system as a get-out-of-jail-free card,” Lauren Saunders, associate director of the National Consumer Law Center, said.

[pinkdutchtulips]

my FB feed is full of 'i'm not gonna pay my SL bc THEY lied to me !!' from former students of Corinthian Colleges, Inc. in Nor Cal.

some are hopeful that somehow their loans will be forgiven ?!? and they won't be stuck owing $35k+ on a medical assisting certificate that most are finding out can be obtained through local adult education (night school) for $4k ....

[onomatopoeia]

Apr 30, 2015 18:03:55 GMT -5 pinkdutchtulips said:

my FB feed is full of 'i'm not gonna pay my SL bc THEY lied to me !!' from former students of Corinthian Colleges, Inc. in Nor Cal.

some are hopeful that somehow their loans will be forgiven ?!? and they won't be stuck owing $35k+ on a medical assisting certificate that most are finding out can be obtained through local adult education (night school) for $4k ....

I did hear something today about Corinthian students being able to have their loans forgiven, but none of their credits would be valid.  So basically they can choose to  keep the loan and the credits, or lose the loan but get nothing out of it.  I don't know if it was a proposed option, or an actual real option in place now.  

I'm not sure how useful Corinthian credits are anyway - are they transferable?  

 

[nursewife]

Apr 30, 2015 18:20:25 GMT -5 onomatopoeia said:

Apr 30, 2015 18:03:55 GMT -5 pinkdutchtulips said:

my FB feed is full of 'i'm not gonna pay my SL bc THEY lied to me !!' from former students of Corinthian Colleges, Inc. in Nor Cal.

some are hopeful that somehow their loans will be forgiven ?!? and they won't be stuck owing $35k+ on a medical assisting certificate that most are finding out can be obtained through local adult education (night school) for $4k ....

I did hear something today about Corinthian students being able to have their loans forgiven, but none of their credits would be valid.  So basically they can choose to  keep the loan and the credits, or lose the loan but get nothing out of it.  I don't know if it was a proposed option, or an actual real option in place now.  

I'm not sure how useful Corinthian credits are anyway - are they transferable?  

 

In my area, there are a ton that take the PSW (personal support worker) course in hopes of getting into a nursing program after. They would lure students and say that their credits can be used towards a nursing program. It always makes me sad to see people wanting to get ahead and get an education, and then finding out it is pretty much useless when they are finished.

[pinkdutchtulips]

Apr 30, 2015 18:20:25 GMT -5 onomatopoeia said:

Apr 30, 2015 18:03:55 GMT -5 pinkdutchtulips said:

my FB feed is full of 'i'm not gonna pay my SL bc THEY lied to me !!' from former students of Corinthian Colleges, Inc. in Nor Cal.

some are hopeful that somehow their loans will be forgiven ?!? and they won't be stuck owing $35k+ on a medical assisting certificate that most are finding out can be obtained through local adult education (night school) for $4k ....

I did hear something today about Corinthian students being able to have their loans forgiven, but none of their credits would be valid.  So basically they can choose to  keep the loan and the credits, or lose the loan but get nothing out of it.  I don't know if it was a proposed option, or an actual real option in place now.  

I'm not sure how useful Corinthian credits are anyway - are they transferable?  

 

from what i gather, from former students who looked in Carrington (part of DeVry), only FOUR units would transfer. 

[onomatopoeia]

Apr 30, 2015 18:25:47 GMT -5 nursewife said:

Apr 30, 2015 18:20:25 GMT -5 onomatopoeia said:

I did hear something today about Corinthian students being able to have their loans forgiven, but none of their credits would be valid.  So basically they can choose to  keep the loan and the credits, or lose the loan but get nothing out of it.  I don't know if it was a proposed option, or an actual real option in place now.  

I'm not sure how useful Corinthian credits are anyway - are they transferable?  

 

In my area, there are a ton that take the PSW (personal support worker) course in hopes of getting into a nursing program after. They would lure students and say that their credits can be used towards a nursing program. It always makes me sad to see people wanting to get ahead and get an education, and then finding out it is pretty much useless when they are finished.

 That's so sad.  

[nursewife]

Apr 30, 2015 18:49:02 GMT -5 onomatopoeia said:

Apr 30, 2015 18:25:47 GMT -5 nursewife said:

In my area, there are a ton that take the PSW (personal support worker) course in hopes of getting into a nursing program after. They would lure students and say that their credits can be used towards a nursing program. It always makes me sad to see people wanting to get ahead and get an education, and then finding out it is pretty much useless when they are finished.

 That's so sad.  

It really is. They always seem to prey on the people who already have a low income, and know very little about post secondary education. I see at least one post weekly on my FB buy and sell page for people looking for that course with one of their colleges. It always makes me sad.