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Bankrupt for-profit college chain Corinthian Colleges Inc. is already party to a number of state and federal investigations related to the alleged deceptive recruiting practices at its Heald College, WyoTech and Everest University campuses. Now, a group of senators are hoping to add another investigation to the roster.
The seven senators are urging recently confirmed Attorney General Loretta Lynch to open an investigation into whether or not the Department of Justice can hold executives of CCI personally accountable for their actions related to the company’s unfair practices and eventual downfall.
The group –– which includes Sens. Dick Durbin of Illinois, Elizabeth Warren of Massachusetts, Richard Blumenthal of Connecticut, Jack Reed of Rhode Island, Ed Markey of Massachusetts, Chris Murphy of Connecticut and Al Franken of Minnesota –– says in its letter to Lynch that because the Department of Education has limited resources for holding individuals responsible for misconduct related to CCI, that it is critical that the Department of Justice get to the bottom of the issue.
“Corinthian’s collapse over the past year has come at the cost of hundreds of millions in taxpayer dollars and at the expense of thousands of students who were enticed to enroll in – and to incur massive debt for – failing school programs,” the letter states. “At the same time that Corinthian’s executives were enriching themselves on federal student loan dollars, with the CEO making an annual salary that exceeded $3 million, allegations of Corinthian’s misbehavior grew increasingly widespread.”
The senators point out that CCI is already subject to a number lawsuits, including civil complaints by the Consumer Financial Protection Bureau and three state attorneys general, as well as investigations by at least 20 more state attorneys generals and the Securities and Exchange Commission.
“With this much smoke surrounding Corinthian, it is incumbent on the Justice Department to search carefully for fire,” the letter states.
Although the senators say that it’s important to hold the corporation accountable for its alleged misconduct, it’s also imperative that those who led the company be held responsible for their actions.
“It is vital that Congress and the public understand what tools the Justice Department can use to hold such executives responsible individually,” the letter states. “If these tools are inadequate, Congress may need to act.”
The senators’ letter to Lynch comes two days after the company filed for bankruptcy and a week and a half after CCI announced it would close its remaining campuses with just one days notice.
CCI’s prolonged collapse began last July when it entered into an agreement with the Department of Education to sell or close a majority of its campuses. Prior to the agreement CCI enrolled 72,000 students and received $1.4 billion in federal student aid.
Since that time, Corinthian completed the sale of some 56 campuses to Education Credit Management Corporation in early February. In order to close that deal, ECMC agreed to provide $480 million in forgiveness for current and former students who took out CCI’s high-cost private student loans.
Senators Call For Attorney General Investigation Of Corinthian Colleges Failure [Dick Durbin]
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