explosive Huffington Post investigation documents that Everest College paid
more than a dozen companies to hire its graduates into temporary jobs before
cutting them loose.
College's $2,000-per-head "subsidy" program program in Decatur,
Ga., stands among an array of tactics used for years by the institution's
parent company, Corinthian Colleges Inc., to systematically pad its job
placement rates, according to a review of contract documents and lawsuits and
interviews with former employees by the Post's Kirk Kirkham.
a marketing tool to lure new students, solid job placement rates allow the
company to satisfy the accrediting bodies that oversee its nearly 100 U.S.
campuses, while enabling Corinthian to tap federal student aid coffers -- a
source of funding that has reached nearly $10 billion over the last decade,
comprising more than 80 percent of the company's total revenue.
employees in career services offices at Everest College campuses in six states
described a culture of data manipulation inside the company, one where hitting
monthly employment targets took priority over finding quality positions for
students. They told HuffPost that their supervisors instructed them to seek out
potential employers with typically high turnover rates: That way, as one
graduate left or was terminated, a spot opened up for another, enhancing the
college's job placement record.
"I was directly told, 'You need to find a company that
is willing to take on your students for a short period of time, and who cares
if they stay?'" recalled James Proby, a former director of career services
at an Everest campus in Colorado Springs, Colo., who left last year after
souring on the company. "That becomes a broken system. And that's what
Those who have worked and studied at its campuses say
Corinthian is a powerful marketing machine finely calibrated to exploit hard
economic times. Its business has grown swiftly during and after the Great
Recession, which left tens of millions of Americans unemployed and many in
search of the kind of training advertised by Corinthian's schools. Between 2007
and 2011, the company's revenues nearly doubled as enrollments soared from
62,000 to more than 93,000, according to securities filings.
Corinthian's ubiquitous advertisements -- "A better
career, a better life, a better way to get there" -- have proved alluring
for workers seeking a path to new livelihoods.
"Before I signed up, they said, 'We'll find you the
job,'" recalled Johnna Heath, 46, who enrolled three years ago in a course
in medical billing at an Everest College campus in Everett, Wash., about 30
miles north of Seattle. "I was like, 'Oh boy, that's great. That just
takes all the weight off my shoulders.'"
After years of fruitlessly searching for a job in her
field, she recently moved back in with her elderly parents in California.
Robyn Smith, a former deputy attorney general in California
who was part of a team that first brought suit
against Corinthian in 2007
, said false promises about careers are
among the most objectionable practices she has seen in the for-profit college
"The job placement deception is really the worst kind
of deception," said Smith, now an attorney at the National Consumer Law Center.
"The only reason that students are going to these colleges and getting
certificates is because they want a higher-paying job. It really goes to the
heart of what these students are looking for and hoping for, and that's why
it's so upsetting when they graduate and can't find the kinds of jobs that were
Admissions departments on Corinthian campuses function as
sales forces, former Corinthian employees said, and those who work there
confront strict monthly targets for enrolling new students. These former
employees made clear that job placement was a central component of the
company's marketing scripts, with career services offices tasked with
satisfying the claims -- at least on paper.
Former career services staffers said they felt tremendous
pressure from management to meet job placement goals, and to stretch the
definition of a successful placement. For example, they were encouraged by
executives to count dental assistant graduates who worked at a one-day
volunteer event as "placed" in the field. Business graduates who got
jobs moving boxes in warehouses were considered successfully employed in
Once those jobs ended, the graduates found themselves still
staring at untenable debts -- without support from their alma mater. Corinthian
abruptly cut them off from further career services, according to former
employees: What mattered was finding temporary positions for new graduates in
order to maintain the company's official job placement rates.
Toya Smith, a former career services employee at an Everest
campus in the Houston area who quit in October, said she and her colleagues
were instructed to develop relationships with certain doctor's offices and
other firms that were known to churn through lots of Everest students.
"It's like a recycling situation," said Smith.
"It really makes you wonder how you are contributing to society. All you
are doing is trying to make your numbers. But you're selling a dream to a
student that you know, in reality, they are not ever going to realize."
Accusations that schools leave students facing large debts
and poor job prospects are perennial in the for-profit higher education
industry. Corinthian owes its very existence to another major player in the
business, National Education Corp., which opted to spin off some of its
properties after running into trouble with the federal government two decades
The National Education Corp. had owned a network of more
than 50 for-profit training schools, making it one of the largest college
corporations in the country. But as large numbers of its
students began to default
on federal student loans in the late
1980s -- more than 40 percent at some campuses -- the federal government
threatened to pull funding from some of the worst-performing schools. The
parent company began looking for a buyer.
Five senior managers joined to purchase 16 of National
Education's schools in 1995, calling the new company Corinthian Schools Inc.
They quickly expanded the business by snapping up other ailing trade schools.
Four years later, Corinthian sold shares on Wall
Street in an initial public offering valued at $48.6 million.
As the company continued to grow, executives saw healthy
returns. David Moore, a retired Army colonel and former community college
president who became Corinthian's first chief executive, initially put up
$100,000 to help buy out the National Education schools, according to news
accounts at the time. By 2003, with Corinthian's stock surging, his
shares were worth more than $100 million.
the attorney general's office -- then led by Jerry Brown, now California's
governor -- filed a complaint alleging a wide range of fraudulent behavior.
Among the tactics described in the lawsuit: career services staff had counted
students as being"placed" at
they'd created as part of a class project
design business cards.
settled the case in July 2007, admitting no wrongdoing while agreeing to pay
$5.8 million in restitution to students. As part of the settlement
Corinthian agreed to cease the activities alleged in the complaint.
As news of the attorney general's investigation trickled
out, damaging Corinthian's brand and sending its stock price down, the company
began renaming the majority of its schools across the country. Several
including Bryman College, a chain of more than 20 campuses in a half dozen
states, became Everest College. Under the new brand, and with the
California settlement behind it, the company was poised for more explosive
The source of that growth was the worst economic downturn
since the Great Depression. As unemployment offices filled with freshly jobless
people, and as financial anxiety spread, Corinthian's executives smelled a
"There is no doubt that the current economic
environment is challenging, but it also creates opportunities," Corinthian
chief executive Jack Massimino said in a November 2008 conference call with
investors. "On the positive side of the ledger, as unemployment rises, more
people return to school to improve their job skills."
That was how Eric Parms found Everest College. Originally
from Ohio, Parms was laid off from his job at a foundry outside Cleveland. He
and his wife decided to move to Georgia, seeking a fresh start. But it was
still difficult to string together enough income to support their two children.
Parms had a job at a local AutoZone store, but it was barely enough to make
He saw a television commercial for Everest in 2010 that
touted career training in technical fields like air conditioning repair,
plumbing and carpentry. He related to the pitch, which mentioned middle-aged
parents needing to take care of their families.
"It was like, 'A year from now, you could be in a
career making decent money,'" Parms recalled. "So that was my
He enrolled in the heating, ventilation and air
conditioning (HVAC) program and did well, he said. The only time he missed a
class was the day he found out his 7-year-old son was diagnosed with leukemia.
But after graduation, he became suspicious. Despite
advertisements about job placement rates on the front end, the career services
counselors were of little help.
When he arrived at interviews they'd supposedly set up
for him, potential employers often had no idea who he was, and they had never
heard of Everest, he said.
Parms was persistent, so eventually the career services
staff told him about a short-term opportunity to help lay electrical wire for a
contractor at the Centers for Disease Control and Prevention.
The pay was solid -- nearly $19 an hour. But his
employer, ADG Enterprises Inc., treated Parms and other Everest graduates on
the crew in a way that heightened his sense that he'd been placed in something
other than a real job.
One day the crew finished early and had nothing left to
do. Rather than send the workers home early, Parms's boss declared that the
Everest students were required to work 40 hours a week. He took them to a
nearby Home Depot, bought a broom and told them to sweep around the job site.
At the end of the day, Parms recalled, the boss went back
to Home Depot and returned the broom. "No contractor does that,"
Parms said. "That's what made me think something was going on."
He was laid off from ADG Enterprises when the contracting
job at the CDC ended. "We busted our asses to get that job done," he
said. "But once that was over, they never called any of us back."
He said that when he contacted Everest seeking further
job placement help, no one returned his calls.
The school had essentially placed him in a temporary
internship program that was partially financed by the company. To increase job
placement rates and maintain accreditation, the Everest campus in Decatur had
started a "subsidy" program in 2011, paying companies $2,000 for
every student they hired.
obtained by HuffPost outlined the
details of this "local employer affiliation agreement" at Everest's
Decatur campus. Titled "Everest stands behind its graduates," the
document refers to the $2,000 bonus as a fee that would "help defray the
costs of on-boarding" Everest graduates.
A former career services employee at the Decatur campus
said the subsidy program was billed as a way for employers to purchase uniforms
or pay for training. But the true intent was to meet placement goals, the
One of Corinthian's accreditors, the Accrediting Council
for Independent Colleges and Schools, required programs to have a 67 percent
job placement rate last year to avoid further scrutiny. Another similar body,
the Accrediting Commission of Career Schools and Colleges, requires a 66
percent placement rate for a college to avoid additional paperwork. Corinthian reported a 69
percent overall job placement rate for its 2012 graduates,
according to the company's most recent annual filing from September.
"We knew what the fine line was, if we were asked,
but we all knew that it was a hiring incentive," said the former employee,
who requested anonymity because of legal entanglements surrounding the job
The employee confirmed that ADG Enterprises, the
contracting firm that temporarily hired Parms, participated in the
$2,000-per-student program. Diana Patterson, the company's president, said she
was paid to place Everest students in what she called a "short-term
internship project." When the job at the CDC was complete, there was no
more work for the students, she said.
The subsidy program effectively undermined the incentive
for ADG and other employers to hang onto Everest graduates long-term: They
could collect $2,000 just for employing a graduate for 30 days, then lay him
off to vacate a space for another graduate, thereby capturing another $2,000
In several cases, employers did not send paychecks until
they received the $2,000 from Everest, meaning the graduates went unpaid for
nearly a month, the former employee said.
Some career services employees had family members set up
dummy corporations so that they could collect the money for themselves, a
former employee said. Some of those employees were later fired.
According to the former employee, top-level Corinthian
executives sanctioned and even praised the subsidy program at the Decatur
campus when it was launched in the summer of 2011. But in a matter of months,
as problems began to surface, the tone quickly changed. Lawyers from the
corporate office began showing up to take depositions. Many employees were
The executive director of Everest's accreditor, Michale
McComis, did not respond to questions about problems at the Decatur campus,
writing in an email that the agency considers accreditation decisions to be
confidential. In an annual filing with the
Securities and Exchange Commission last year, Corinthian noted
only that accreditors put the school on a probationary status because it was
not in compliance with "required student achievement outcomes."
The lawsuit filed against Corinthian in October indicates
the practice of paying employers to hire graduates wasn't confined to the
Decatur campus. In that suit, the California attorney general alleges two
Everest campuses in her state also paid a temp agency
to place students in order to "meet the accreditation
deadline and minimum placement %."
Whitney Gilford graduated from an Everest medical
assistant program in Houston in 2011 and was promptly placed at a family-owned
medical clinic. When she first started, staffers at the clinic told her that
lots of Everest students came through but rarely stayed.
She was paid $7.25 an hour, and was often asked to clean
toilets or to do the clinic's laundry. She quit after a month. Everest's career
services never helped her again, she said.
Her experience reflects the company's standard operating
procedures, according to former Everest employees: Once a student is officially
placed in a position, she is no longer a priority -- even if she only stays on
the job for a few days or weeks.
"The jobs that we had were for the [students] who
just graduated," said Ivana Lodovici, a former career services director at
an Everest campus outside Miami, who was fired after failing to meet job
placement quotas. "We were not allowed to re-place people who had already
been placed. It was kind of like, 'You had your chance, that's too bad.'"
Ali Lueder, who worked in career services at an Everest
campus outside Chicago, said she was reprimanded for trying to help students
who had been recently placed but then fired.
"You don't answer their calls, you don't respond to
their emails," she recalled a manager saying. "Sure they're angry,
but you just keep ignoring them and eventually they get so fed up they stop
After his initial contract job ended, Eric Parms was
forced to seek work without Everest College career services' support. He
quickly found himself unprepared for the difficulties of making his way in the
HVAC field. When he interviewed for jobs with contractors, Parms said, many of
them expressed doubt about the quality of Everest's training, and were
unwilling to take a chance on an inexperienced recent graduate.
To work on his own, he would need a Georgia contractor's
license. But getting the license required years of experience and written
recommendations from other licensed contractors. Parms said Everest never
disclosed that fact during the admissions process or while he was attending
His wife, Leticia, also went to Everest to study medical
assisting. She hasn't found a job in her field, either. Lately, Parms has been
shuffling through temp agencies, stringing together hours working at factories.
only part-time work for more than two years, Parms has struggled to support his
family. After his youngest son, Corleone, was diagnosed with a rare form of
leukemia in 2011, doctors recommended an experimental treatment. The medicine
is financed by a pharmaceutical company, so the family hasn't had to face any
"You just get tired of it. I kept giving it my all,
and I got the same results," Parms said. "Everest has been in the
rear-view mirror for a long time now."