The recent news surrounding the for-profit higher education sector has been dismal. Two weeks ago, after ongoing investigation by the Department of Education (ED), Corinthian College Inc. was fined $30 million.
That fine, which was just the latest blow for the beleaguered for-profit network, set into motion a number of events that led Corinthian to announce on Sunday that it would close its remaining campuses for good.
This is not an isolated event. The entire for-profit industry has been under fire for its alleged focus on signing up students and depositing their federal financial aid checks rather than providing a quality education.
Almost all of the biggest players in the for-profit sector have been investigated by state attorneys general, including EDMC, ITT, Career Education Corporation, Kaplan, DeVry, and Bridgepoint.
"I think that bad actors in the for-profit college business have engaged in an appalling display of abuses of students and of tax payers," attorney David Halperin told Business Insider.
For-profit schools with deep pockets also heavily lobbied to eliminate accountability rules, according to Halperin, the author of "Stealing America's Future: How For-Profit Colleges Scam Taxpayers and Ruin Students' Lives."
He believes this created a system that incentivized the exploitation of students, and the industry is getting a reputation for doing just that.
"I think the sector is damaged. The biggest players in the sector are almost all of them are under investigation by both state and federal law enforcement," Halperin said.
Corinthian was one of the largest for-profit system in the US. But after litigation was brought against the company and many of the colleges closed, the Consumer Financial Protection Bureau (CFPB) and the ED worked together to secure $480 million in debt relief to students of Corinthian. The most recent development completely shutters the college system.
The closure will affect 16,000 students enrolled in Corinthian schools and further necessitate a decision by the ED on how to deal with the debt those students incurred while attending Corinthian.
Another big for-profit chain, Apollo Education Group, the parent company of The University of Phoenix, is the largest for-profit system in the US and has been shouldering massive enrollment declines year after year. Enrollment numbers have been cut in half from five years ago, down from 460,000 to 213,000, according to CNN Money. Further, the company has come under investigation by several different state's attorneys general and the ED.
Apollo Chief of Staff, Mark Brenner, has previously acknowledged the declining enrollment numbers and said that it was a challenging quarter and that certain changes should be made to improve the downward trend.
"I think what we've learned over the last couple of quarters we need to continued to invest in creating a better student experience, we need to have the best online classroom for students ... and we need to provide outsize value for students and align all of the curriculum and all of the teaching to career relevant outcomes for students," Brenner told Business Insider for an earlier story.
For Corinthian 's part, it stands by its claim that it did a good job serving students that it shouldn't have been forced to close.
"Unfortunately the current regulatory environment would not allow us to complete a transaction with several interested parties that would have allowed for our students to continue their education uninterrupted," a spokesperson told Business Insider.
Corinthian is only one for-profit system in a multibillion-dollar sector, so the discussion about the future of for-profits is certainly a topic that won't disappear and will likely even come up during the presidential election.
"Some of the for-profit schools, some of the scandals that have arisen in these places where they take all this money and put all these young people and their families into debt,” Hillary Clinton said at an education roundtable event in Iowa.
