On Thursday, October 10, 2013, California Attorney General Kamala Harris filed a civil lawsuit against for-profit educational company Corinthian Colleges, Inc. (“Corinthian”). The lawsuit follows a ten-month investigation by the California AG’s Office and it accuses Corinthian of false advertising, lying to students, and defrauding investors.
The for-profit education sector has come under increased scrutiny in recent years for its aggressive marketing practices and outsized tuitions. Corinthian is one of the industry’s largest players. It operates 111 schools with fifteen thousand employees and eighty-one thousand students across twenty five states and in Canada. Corinthian maintains four campuses in Georgia, where it operates under the trade name Everest College. Corinthian charges average tuition of $40,000 for an associate’s degree.
The California AG’s lawsuit alleges that Corinthian inflated job placement figures in advertisements to prospective student and in reports to investors and accrediting agencies. It targeted these false advertisements, the AG alleges, at vulnerable populations like low income earners, military veterans, and single mothers. For example, Corinthian allegedly advertised 100 percent job placement rates in degree programs where, often times, no students actually found any work. It also advertised degree programs—for, e.g., ultrasound, x-ray, radiology and dialysis technicians – which it did not actually offer in California.
The allegations of the California lawsuit echo the findings of a recent Congressional investigation into the for-profit education industry. That investigation revealed that for-profit colleges engaged in deceptive marketing practices and charged students outsized tuition for degrees that infrequently led to employment.
Fried & Bonder is currently investigating claims against for-profit colleges. If you believe you have been the victim of false representations or other , please contact us.