In wake of Corinthian Colleges collapse, some NC vets burdened with debt and worthless training

By: - July 8, 2015 5:59 am


Corey Davis, a veteran living in Greensboro back in 2013, wanted to open his own small company and figured a degree in business was the ticket to success.

Davis searched on the Internet for flexible online education options so he could hold down a job while he studied.

“I was looking up college courses in business management and Everest College came up,” said Davis of the private, for-profit Corinthian Colleges subsidiary that operated online degree programs as well as brick-and-mortar schools. “I talked to the admissions folks and they told me Everest credits were transferable to other schools,” in addition to other promises made about the quality of the training the school would provide.

But when Davis moved to Whiteville last year and then tried to see if he could finish up his coursework at the local community college that was right across the street from his home, he quickly learned none of the three semesters of coursework he had completed at a cost of $8,000 per semester would transfer.

“‘We can’t use any of this,’” Davis said he heard from school officials at Southeastern Community College. “So I was stuck.”

In April, Corinthian Colleges shuttered all of its campuses and online education programs following intense pressure from federal and state regulators, who found that the school engaged in predatory practices ranging from misrepresenting its post-graduation job placement rates to targeting vulnerable, low-income individuals who were desperate for work but underprepared for higher education.


For the 16,000 students across the country who were enrolled at Corinthian Colleges at the time of the school system’s collapse, the U.S. Department of Education is in the process of forgiving their loans under what is called a “closed school” discharge procedure.

But for the many more tens of thousands of former students and alumni who never finished programs or got degrees or certificates that haven’t proved to be of much worth, it’s unclear how the federal government will handle any remaining student loan debt they may still carry.

And for veterans who used their GI Bill benefits to pay for tuition at the now defunct Corinthian schools, they are currently without any recourse at all. The GI Bill benefits are not loans—rather, they more like federal grants that come in the form of monthly payments that are commensurate with the years of military service a veteran has logged.

According to Politico, the 90-plus Corinthian schools operating as Everest College, Heald College and WyoTech were popular with GI Bill-going veterans, with 6,427 veterans attending a Corinthian school in the 2012-13 term.

U.S. Senator Richard Blumenthal
U.S. Senator Richard Blumenthal

U.S. Senator Richard Blumenthal (D-Conn), a ranking member of the SenateCommittee on Veterans Affairs, reportedly plans to file legislation soon that’s intended to give veterans their GI Bill benefits back if they attended Corinthian Colleges—but the chance of it becoming law is not clear.

Davis, a veteran who served in the Army between the years of 1990 and 1994 as a chemical operations specialist, wasn’t able to take advantage of educational supports for veterans because under the Montgomery GI Bill, he was well past the 10 year window for using those benefits. And the Post-9/11 GI Bill only applies to those who served in active duty after the September 11 attacks on the World Trade Center.

Saddled with federal Stafford loans amounting to $16,000 today, Davis is working slowly to pay them off.

“I’ve got to handle these loans first,” said Davis, before even considering going back to school to finish a degree. Now 44, he says he has a truck he drives to earn money.

“I did learn some things,” at Everest, said Davis. “It was a heavy load of classes, but I made time to get it done. The way they had it set up, there was a lot of work to do, but I understood a lot of it.”

Sara Collins with the non-profit Veterans Education Success says there’s a chance people like Davis might end up having some recourse after all.

“Hopefully in the next two weeks, the U.S. Department of Education will make a form available for others to appeal for loan forgiveness,” said Collins.

Davis could potentially file a claim to discharge his loans based on fraud or violation of other state law, citing the fact that Everest officials told him his credits would transfer to other schools only to learn that was not true.


Efforts to rein in for-profit institutions of higher education accused of predatory practices have been going on for decades.

Most recently, the U.S. Department of Education issued final rules —effective July 1 — that are designed to protect taxpayers and students from career colleges that do not lead to gainful employment post graduation.

Too often, students at career colleges—including thousands of veterans—are charged excessive costs, but don’t get the education they paid for,” according to the DOE’s press release announcing the final rules last fall.

If career colleges like Corinthian fail to demonstrate that the lion’s share of their graduates become gainfully employed—that is, a graduate’s annual loan payments cannot exceed 20 percent of his or her discretionary income or 8 percent of his or her total earnings — then those schools would be at risk of losing their ability to participate in taxpayer-funded federal student aid programs.

Many career colleges, like Corinthian, receive nearly 90 percent of their revenues from federal student aid programs, the statutory limit authorized by Congress. Losing the ability to participate in the federal student aid program would spell disaster for most schools.

U.S. Rep. Virginia Foxx
U.S. Rep. Virginia Foxx

U.S. Rep. Virginia Foxx (R-N.C.) has been pushing legislation that would repeal the ‘gainful employment’ regulations, citing the need to reduce federal regulations that could stifle innovation thanks to burdensome reporting requirements.

Foxx, chairwoman of the House Education Committee’s subcommittee on higher education and workforce training, received campaign contributions from Corinthian Colleges during her last reelection campaign in 2014—nearly $20,000.

And the for-profit education industry was her largest source of out-of-state campaign contributors as well, according to the Center for Responsive Politics.

David Bergeron, who formerly served in the Obama administration and is now with the Center for American Progress, says the recent efforts by higher education institutions to buck efforts to hold them accountable all boil down to money.

“The higher ed lobby doesn’t want any accountability—they want money, and they want money without limitations, without restrictions, without accountability to anybody outside the academy,” said Bergeron.

“What that has led to is very poor performance by our institutions—graduation rates are alarmingly low, and employers are becoming increasingly concerned that the employees they’re hiring out of the academy don’t have the knowledge and skills they require.”


When Pinebluff resident Brandon Christman was in high school back in 2011, he heard about a career training program in Pennsylvania that would provide him with the skills necessary to become a diesel mechanic.

Christman enrolled at Wyotech, a Corinthian college, and spent a year in their training programs at their Blairsville, PA campus, eventually earning a diesel tech certificate and an associates degree in applied service management.

“Some of the classes were okay, but overall it was kind of bad,” said Christman of his experience at Wyotech Blairsville, which is one of a few Corinthian colleges that didn’t close but were instead bought out by another company. “I wouldn’t recommend going there. In fact, a buddy of mine was thinking about [attending Wyotech] and I told him don’t. We learned some stuff, but not enough we needed to know…the main stuff we needed know wasn’t stressed.”

Christman’s training was so poor he ended having to get a job in a completely different industry—power line construction. But he still had his sights set on becoming a diesel technician, so he joined the Army.

“I had to go into the military to get a diesel job,” said Christman. “I’ve gotten on-the-job training as well as advanced individual training lasting 3.5 months. Now I’m a diesel mechanic for the Army and I am currently a service member working at Fort Bragg.”

But Christman is struggling to pay the $35,000+ in student loans he got in order to attend Wyotech for a year.

“My mom co-signed the loans with me,” said Christman. “I’m really struggling to pay them. At this point, they are about $400+ a month, more than a quarter of my monthly paycheck.”

Christman’s supervisors in the Army want him to consider going back to school for more education.

“The loans are just too much,” said Christman. “I said, ‘There’s no way you’re getting me back [in college]. Forget it.’”

Education reporter Lindsay Wagner can be reached at 919-861-1460 or [email protected]

Twitter: @LindsayWagnerNC

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Lindsay Wagner

Lindsay Wagner, former Education Reporter for N.C. Policy Watch. Wagner now works as a Senior Writer and Researcher at the NC Public School Forum. She has also worked for the American Federation of Teachers in Washington, D.C., as a writer and researcher focusing on higher education issues and for the National Education Association, the U.S. Department of State's Fulbright program and the Brookings Institution and an Education Specialist at the A.J. Fletcher Foundation. [email protected]