Legal proceedings
Corinthian Colleges was investigated in Canada and by federal authorities in the United States, and by several states attorneys general for deceptive advertising and other fraudulent acts.
California
In 2008, a class action suit was filed against CCI and a wholly owned subsidiary in Santa Clara Superior Court on behalf of graduates of Bryman College's medical assistant vocational programs. The lawsuit alleged that Bryman made untrue or misleading statements to students related to employment success, in order to induce them to enroll and stay enrolled in their medical training programs. This case was ultimately dismissed.
In July 2007, the California Attorney General threatened to file suit against Corinthian Colleges. Corinthian issued a statement saying: "We disagree with the Attorney General's conclusions, but we are pleased to have this matter behind us. The agreement is not evidence of wrongdoing, and the company specifically denied any wrongdoing as part of the settlement. We are fully committed to providing quality education and job placement services for students and to being in compliance with state law and regulation."
In October 2013, the State of California again sued CCi alleging "false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements". According to the Sacramento Bee, fourteen Everest College campuses registered three-year default rates on student loans of more than 20 percent; eight were more than 30 percent.
In November 2013, CCi issued a statement asserting that the California Attorney General's complaint was "a document built on a foundation of misquoted, deceptively excerpted and—at best—misunderstood materials." It went on to say that the California Attorney General was "wrongly accusing our schools of inflating job placement statistics for our graduates". CCi indicated that it planned to "vigorously defend the integrity of the work we do for our students and graduates".
California Attorney General Kamala Harris filed a complaint alleging that CCI had engaged in a predatory marketing campaign targeting job seekers and single parents with incomes near the federal poverty level. The Department of Justice obtained internal company documents in which CCI employees described the company's target demographic as "isolated", "impatient", individuals with "low self-esteem", who have "few people in their lives who care about them" and who are "unable to see and plan well for future". The complaint alleged that CCI had used aggressive Internet and telemarketing campaigns, as well as television ads on daytime shows like Jerry Springer and Maury Povich to reach these individuals.
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Federal investigation in the United States
On October 17, 2007, U.S. Department of Education investigators seized records at Florida campuses of for-profit colleges, including CCi's former National School of Technology in Fort Lauderdale, Florida, and Florida Career College (a division of Anthem Education Group) in Lauderdale Lakes, Florida and Pembroke Pines, Florida. The school reported that it was not informed why the records were seized or why similar actions had been taken against other institutions in the area. The campus reopened the next day.
In June 2013, CCi disclosed that it was under investigation by the Securities and Exchange Commission (SEC). CCi is cooperating with the SEC in its investigation. The SEC did not file any actions against CCi in connection with this investigation.
In November 2013, the US Consumer Financial Protection Bureau reported that they were investigating CCi. In December 2013, CCi received a "Notice and Opportunity to Respond and Advise" letter from the CFPB. CCi responded by stating that it "believes that its acts and practices relating to student loans are lawful and that its lending program is essential to many students". The company also explained that the loans offered under the program are "modest in size and have reasonable interest rates", and that the loans allow many students to attend college who otherwise would not have the opportunity to do so. The average loan amount per borrower is $4,700 and the average annual interest rate is 8.5 percent and the maximum rate is 9.9 percent. Loans are only offered to students who have a gap between their educational costs and the available financial aid from all other government and personal sources. The CFPB filed a lawsuit against Corinthian in September 2014 over its loan program and debt collection practices.
In April 2015, the college was fined almost $30 million by the U.S. Department of Education. The department found the school had misled students and loan agencies about the prospects for graduates to find jobs. Within two weeks, the college shut down.
In May 2018, a federal judge ordered the U.S. Department of Education to stop collecting on student loans related to Corinthian. In October 2019 the same judge held U.S. Education Secretary Betsy DeVos in contempt of court because the Department had continued collecting on 16,000 such loans in spite of the court order.
Loan forgiveness
On June 1, 2022, the U.S. Department of Education announced that it would cancel all federal student loans owed by more than 560,000 students who attended Corinthian Colleges between 1995 and 2015. The amount forgiven would total $5.8 billion and would be the single largest discharge of student loans in history according to the department.
Other state investigations
In 2004, a former student from Florida Metropolitan University initiated an action against CCi, claiming he was misled with respect to the school's accreditation and his ability to transfer credits. The lawsuit proceeded in arbitration pursuant to the agreement between the parties. After hearing all of the evidence, the arbitrator found in favor of CCi on all counts and dismissed the lawsuit.
In April 2005, fourteen students from Bryman College's Tacoma, Washington campus filed an action against CCi in the Superior Court of the State of Washington. The students claimed they did not receive proper training for their careers in medical assisting, that they were misled about the program's accreditation status, their eligibility to take a national certification exam, the transferability of their credits, and the availability of internships. The case was moved to the United States District Court for the Western District of Washington and was ultimately dismissed.
In August 2007, the State of Florida closed an investigation into Florida Metropolitan University with no fines, penalties or findings of wrongdoing. The Florida Office of the Attorney General and Florida Metropolitan University entered into an Assurance of Voluntary Compliance acknowledging that Florida Metropolitan University participates in the Florida Statewide Course Numbering System to facilitate the transfer of eligible credits to other institutions. Florida Metropolitan University agreed to continue its efforts to help students with transfer credits and to provide students with clear disclosures.
CCi is awaiting the outcome of regulatory investigations by the SEC and state prosecutors. On January 24, 2014, the Iowa Attorney General's office notified CCi that it is leading an investigation by thirteen states into CCi's business practices. CCi stated that it intends to cooperate. No state attorney general case has been tried and no findings adverse to CCi have been made.
On February 23, 2015, fifteen former and current students of Corinthian Colleges announced they were going on "debt strike", refusing to pay loans accrued for their time at Corinthian schools. They originally called themselves the "Corinthian 15", and after growing, as of April 1, are known as the "Corinthian 100" with 107 members. They are currently pursuing "Defense to Repayment" legal action against Corinthian. Representatives were given a meeting with the Department of Education and the Consumer Financial Protection Bureau.
